A summarise the movements in the exchange rate of the Austalian dollar against the US dollar over the last 36 months.

Topic 2

Summarise the movements in the exchange rate of the Australian dollar against the US dollar over

the last 36 months. Using appropriate models, explain the various ˜factors. which have caused these

movements. Considering current national and international economic conditions, critically discuss the

impacts of the overall exchange rate outcome on the Australian economy and its implications for

monetary and fiscal policies.

Guide to topic 2

A useful source of information is the Australian Financial Review. This newspaper publishes articles

on the fluctuations in the exchange rate almost daily. A prime source of information is, of course, the

Reserve Bank of Australia. In analysing the impacts of the rising dollar on the Australian economy,

you should be familiar with the challenges it is currently facing. As a starting point, read the article:

Cuts won ‘t stave off a recession (The Australian July 2, 2013). Although this article (available on the

Blackboard unit site) discusses mainly the recent RBA’s interest rate decision, it provides a good

snapshoot of our current economic issues.

Title of Essay Provide a title for your essay that indicates what you are trying to argue.

Word limit: 1200 with 20% tolerance. (Tables and reference lists are not in the word count.)

Due Date for Topic 2: Oct 18 (Friday) 2013 by closure of Assignment Minder desk.

Notes for both topics: ˜In preparing for this assignment, you should aim to read as widely as

possible. Other things. being equal, higher marks will be awarded to those assignments which show

evidence (by quotations and/or. references) of wide reading. When you have finished your

assignment. be sure to include a list of references you have used. While the work is to be presented

as an essay it is expected that appropriate use will be’ made of chosen diagrams and tables which

enable you to concisely demonstrate your line of reasoning.