Factors Affecting the Exchange Rate of Aud/Usa
Analysis about factors affecting Australian Dollar US Dollar exchange rate (2006- Q1 2010)
Project Report
Final Project in Banking and Finance (FP 238)
Raffles College of Higher Education
I. Introduction
2.1. Background
Most of the country in the world will have export and import and they will use money to pay for it. Each country will have their different unit of money, which is called as currency. Currency is a medium that is used in the world to be the media as payments. Each country have their own currency, some small country are using the same currency as their surroundings e.g. USA – US Dollar (USD); Germany, Spain, Greece, etc. – Euro (EUR); UK – Poundsterling (GBP); Singapore – Singapore Dollar (SGD); Australia – Australia Dollar (AUD). Therefore one currency will be related to the other currency in the other country, in other word, if country A is facing recession, all country that is located near country A will be facing the same problem and not only the surrounding, but for those country who have import and export agreement with country A will be affected as well. Therefore there is always a fluctuation in the exchange rate. This fluctuation will fluctuate every time, even in a second, it might have fluctuates. Fluctuation in the exchange rate is divided into upward market trend (bull market) which indicate that a currency of a country is getting stronger compare to the other countries’ and downward market trend (bear market) which indicate that a currency of a country is getting weaker compare to the other countries’. “The exchange rate fluctuates. Sometimes it rises and sometimes it falls. A rise in the exchange rate is called an appreciation of the dollar, and a fall in the exchange rate is called a depreciation of the dollar.” (Parkin, 2010).
2.2. Statement/ Problem to investigate
There are many types of investment, one of it, is Foreign Exchange (Forex). This Foreign Exchange investment is done by exchanging
Project Report
Final Project in Banking and Finance (FP 238)
Raffles College of Higher Education
I. Introduction
2.1. Background
Most of the country in the world will have export and import and they will use money to pay for it. Each country will have their different unit of money, which is called as currency. Currency is a medium that is used in the world to be the media as payments. Each country have their own currency, some small country are using the same currency as their surroundings e.g. USA – US Dollar (USD); Germany, Spain, Greece, etc. – Euro (EUR); UK – Poundsterling (GBP); Singapore – Singapore Dollar (SGD); Australia – Australia Dollar (AUD). Therefore one currency will be related to the other currency in the other country, in other word, if country A is facing recession, all country that is located near country A will be facing the same problem and not only the surrounding, but for those country who have import and export agreement with country A will be affected as well. Therefore there is always a fluctuation in the exchange rate. This fluctuation will fluctuate every time, even in a second, it might have fluctuates. Fluctuation in the exchange rate is divided into upward market trend (bull market) which indicate that a currency of a country is getting stronger compare to the other countries’ and downward market trend (bear market) which indicate that a currency of a country is getting weaker compare to the other countries’. “The exchange rate fluctuates. Sometimes it rises and sometimes it falls. A rise in the exchange rate is called an appreciation of the dollar, and a fall in the exchange rate is called a depreciation of the dollar.” (Parkin, 2010).
2.2. Statement/ Problem to investigate
There are many types of investment, one of it, is Foreign Exchange (Forex). This Foreign Exchange investment is done by exchanging