Educational articles

What causes a currency devaluation?

by

Currency devaluation occurs when a country’s currency loses value relative to other currencies. This can happen for several reasons, including: Inflation: When a country experiences high inflation, the purchasing power of its currency decreases, which often leads to devaluation. If inflation is higher in one country compared to others, its currency tends to lose value on the global market. Interest Rates: If a country lowers its interest rates, it may cause its currency to lose value. Lower interest rates tend …

Read MoreWhat causes a currency devaluation?

Why is gold popular in volatile markets

by

Gold is particularly popular in volatile markets due to its historical role as a safe-haven asset, as well as several key qualities that make it resilient during times of economic uncertainty, market swings, or financial crises. Here’s why gold tends to shine during volatile market conditions: 1. Store of Value What it means: Gold has been recognized as a store of value for thousands of years. Unlike paper currencies or other assets that can be devalued through inflation, currency debasement, …

Read MoreWhy is gold popular in volatile markets

Why does the U.S. share market influence the Australian share market?

by

The U.S. share market has a significant influence on the Australian share market for several reasons: 1.Global Economic Integration The U.S. is the world’s largest economy, and its financial markets are deeply integrated with the global economy. Since Australia is a small, open economy, its financial markets are highly sensitive to movements in major global indices, especially the U.S. stock market. When the U.S. market moves, it often signals broader trends in global economic conditions, which can affect Australian companies …

Read MoreWhy does the U.S. share market influence the Australian share market?

What causes the Australian Dollar to increase in value?

by

The value of the Australian Dollar (AUD) can fluctuate based on several factors. While it’s difficult to predict exactly when the AUD will go up in value, here are some key factors that generally contribute to its rise: Commodity Prices: Australia is a major exporter of commodities like iron ore, coal, natural gas, and gold. When global prices for these commodities rise, the AUD tends to appreciate due to higher demand for Australia’s exports. Interest Rates: The Reserve Bank of …

Read MoreWhat causes the Australian Dollar to increase in value?

Why does a placement cause the share price to decline?

by

A share placement refers to the process in which a company raises capital by selling shares (usually a large block of them) directly to institutional investors or a select group of investors. A placement typically causes a company’s share price to decline for a few reasons: Dilution of Shares: When a company issues new shares through a placement, it increases the total number of shares in circulation. This dilutes the ownership stake of existing shareholders. Investors often perceive this as …

Read MoreWhy does a placement cause the share price to decline?