Looking at foreign exchange rate from the period of January 5th to 18th 2012, there is an obvious price increase on US dollars as compared to Australian dollar. Normally the ratio between the two currencies is one-is-to-one and the decimal cents is what determines the gap in between. In the past weeks, the US dollar showed a slow but steady deflation signs especially during the aforementioned time period. By January 5th, the exchange rate goes as AUD 1 = USD 1.0254. Next day rate is at AUD 1 = USD 1.0.229 within 24 hours there is already been a 0.025 improvement on USD and it continued until January 8. Come the 9th the USD value came back to how it was on the 5th of the same month and from then on it wasn’t able to pull itself up again.
AUD
USD
variation
Prev. Day Variation
1 AUD =
1.0254 USD
0.0254
---
1 AUD =
1.0229 USD
0.0229
0.0025
1 AUD =
1.0229 USD
0.0229
0.0000
1 AUD =
1.0199 USD
0.0199
0.0030
1 AUD =
1.0252 USD
0.0252
-0.0053
1 AUD =
1.0298 USD
0.0298
-0.0046
1 AUD =
1.0314 USD
0.0314
-0.0016
1 AUD =
1.0335 USD
0.0335
-0.0021
1 AUD =
1.0323 USD
0.0323
0.0012
1 AUD =
1.0323 USD
0.0323
0.0000
1 AUD =
1.0283 USD
0.0283
0.0040
1 AUD =
1.0319 USD
0.0319
-0.0036
1 AUD =
1.0378 USD
0.0378
-0.0059
1 AUD =
1.0417 USD
0.0417
-0.0039
Given the above data on exchange rate movement between the two currencies, we can conclude that AUD is shows strength in currency value (Australian Dollar (AUD) to US Dollar (USD) exchange rate history January 30, 2012). With the steady and higher rate, investment sectors are looking forward to a better start of first quarter of the year. In fact, wealth funds and other foreign central banks are well attracted to set their plans on adding AUD among their significant currency reserves. With the falling value of Euro and USD, the Russian central bank even expressed their interest on such plans ($A increasingly popular with central banks January 27, 2012). Another good news on the light of higher currency value is the possibility of higher Australian shares value. Australian shares kept its ground on positive outlook on debt auctions at the European market, it is said to create positive returns for banks and creditors (Australian shares higher January 20, 2012).
The reports about Australian economy to stay strong in the midst of negative global economic perspectives was proven true by looking at how the AUD is doing in the foreign stock market. Despite the news about World Bank to downgrade growth forecast for 2012 to 2013 based on the continuous deterioration of the global economy in the last six months, Australian economy will continue to be strong and steady according to Acting Treasurer Bill Shorten (Aust economy strong despite gloomy report January 18, 2012).
Works Cited
Exchangerates.org.uk. January 30, 2012. Web. Australian Dollar (AUD) to US Dollar (USD) exchange rate history. Retrieved January 31, 2012 from http://www.exchangerates.org.uk/AUD-USD-exchange-rate-history.html
Businessspectator.com.au. January 17, 2012. Web. $A increasingly popular with central banks. Retrieved January 31, 2012 from http://www.businessspectator.com.au/bs.nsf/Article/A-increasingly-popular-with-central-banks-QW6QH?OpenDocument&src=rab
Au.finance.yahoo.com. January 20, 2012. Web. Australian shares higher. Retrieved January 31, 2012 from http://au.finance.yahoo.com/news/Australian-shares-higher-aap-216339319.html?x=0
Au.finance.yahoo.com. January 18, 2012. Web. Aust economy strong despite gloomy report Retrieved January 31, 2012 from http://au.finance.yahoo.com/news/Aust-economy-strong-despite-aap-4053047213.html?x=0
