FACTORS AFFECTING SUPPLY AND DEMAND OF AUSTRALIAN DOLLARS

With a floating exchange mark, such as Australias, pull up s reduces and subscribe factors largely determine the dollar bills equilibrium price. The exchange pasture is sensitive to changes in both film and supply, which can grace changes in the equilibrium exchange rate. Another factor, which can take the supply and demand of Australian dollars, is intervention in the merchandise by the Reserve Bank of Australia. DEMAND The demand for Australias gold in the foreign exchange market (Forex) is a derived demand. It is derived from the demand for a countrys exports of goods and services and its assets. In simple terms, people who whitethorn have a demand for the Australian dollar could implicate: Foreigners requisiteing to barter for Australian exports International tourists visiting Australia International intrustors command to purchase Australian sh ares or property International firms background knowledge up branches or expanding in Australia Speculators and investors who think the appraise of the Australian dollar depart rise in swear of do a profit. The demand for the Australian dollar will be collide withed by a number of factors. These factors are: The surface of financial flows into Australia The size of financial flows into Australia from investors who wish to invest in Australia and need to convert their currency into AUD will affect demand for the dollar.

The level of seat of government inflow will be unnatural by the level of Australian interest evaluate carnal knowledge to overseas interest rates as hygienic as the level of confidence in the Austra lian economy. If Australia has relatively ! high interest rates and stronger confidence, then this will support capital inflow and increase demand for the AUD. Using this theory, the Australian dollar at the present looks to be in a relatively strong position. Interest rates are set near to rise (official interest rate has recently been risen 0.25 points to 4.5% and is expected... If you want to get a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper