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Question: Refer your views on “Exchange rate and Australian Economy”. While discussing, please consider past 10...

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Refer your views on “Exchange rate and Australian Economy”. While discussing, please consider past 10 years trend of AUD vs other three major currencies, impact on Australian economy at various phases of that trend. Include the data analysis and interpret your understanding in this regard.

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Australian economy in past 10 years has fairly depreciated against US Dollar, Euro and Pound. The fact of this being Australian economy has been biggest importer coupled woth decrease in exports. Secondly the rising dependence on Oil has been biggest motuvator for depreciation in Australian dollar.

The only time Australian dollar appreciated were in 2011 and 2012 because of Implications of low oil prices which decreased import bills and after effects of US Great Recession of 2009 which shook the European Union as well.

The Australian economy has seen rising inflation and stagnant growth because of mismatch of policy adoption by Central bank ajd Australian Government over past 10 years.

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