Australia's Exchange Rates and the effects from global events

INTRODUCTION The purpose of this report is to document and bring to surface the burdening issue of the effect of global economic conditions on Australia's exchange rate. The beginning of the report details what the exchange rate is and how it can be defined. Following that is a look at the effects of major events on the exchange rate and the government's reaction to these events. The report will also analyse what effects occur from …

…is to lower interest rates. A lower interest rate restores confidence for foreign investors and this in turn increases the supply for the Australian currency. SUMMARY OF FINDINGS In conclusion to make our economy satisfactory we need to keep our exchange rate stable and prevent outside events from affecting it. This report was instigated to make the cabinet aware of the behaviour of our currency and what effects it can cause when it becomes unstable.