The Australian dollar has fallen to its lowest level in 10 years. The price of the Australian dollar is simply driven by demand and supply. Price goes down when the demand is low and price goes up when demand goes up. So why has demand been falling for Australian dollars? Interest Rates The US cash rate is 2.5% and Australian interest rates are only 1% at the moment. The Reserve Bank of Australia (RBA) is considering further interest rate cuts. …
Share investors need to have an understanding of exchange rates because they will influence stock prices. Companies with overseas operations may be impacted positively or negatively depending on the direction on the exchange rates. Not only that, but exchange rates can influence the amount of overseas funds being invested in Australian shares. This article describes the 7 major causes of exchange rate movements. We have also discussed the effects of exchange rates on stocks in a previous article on stocks …
Read MoreThe 7 causes of exchange rate movements that you need to know