Outline the causes of an increase in demand for the Australian dollar Free Essay, Term Paper and Book Report
The Australian Dollar is the world's sixth most traded currency and is used in 6.7 per cent of all currency trades in foreign exchange market. 85 percent of all Australian dollars sold in foreign exchange markets are used to buy US dollars.
One of the causes of an increase in demand for the Australian dollar is the level of Australian interest rates with respect to overseas interest rates. As the interest rates for investment is high in Australia, Australia becomes a more attractive location for foreign savings. Moreover, when there is expectation for an appreciation in the Australian dollar, speculators are more likely to buy the Australian dollar to get a good return. The foreigners invest in Australian dollar to earn some profit through the appreciation of AUD. This causes to demand for AUD to increase.
Businesses all around the world are looking for a better location to expand their businesses. Australia offers a lot of investment opportunities for businesses. This in turns will increase the formation of transnational companies in Australia which leads to the increase of ......
Word Count: 707
Page Count: 2.8 (250 words a page / double spaced)
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