The international financial system

International Financial System

The country you chose.

The country chosen for this analysis is Australia.

The exchange rate and the total amount of the currency you purchased with your $90,000.

As of June 9, 2013 the current value of $90,000 is $94,724.90.

Your prediction for whether your country's currency with increase or decrease in value with respect to the dollar.

The Australian exchange rate will continue to be weak against the U.S. dollar, as the relative indexing of each of these currencies shows Australia's once-robust economy slowing down as mining experts are reduced. As Australia relies on a floating exchange rate, the volatility of both American and Australian capital markets including the direct effects of Gross Domestic Product (GDP) and Gross National Product (GNP), will continue to impact the value of the Australian dollar over the long-term.

As a result the Australian exchange rate will continue to drop against the U.S. dollar as this nations' reliance on a floating exchange rate system makes its currency valuations particularly sensitive to experts, balance of trade, and the current condition of its main industry, mining. The Australian economy continues to be one of the most resilient globally with a 3.4% gain in Gross Domestic Product (GDP) and a very low 5.5% unemployment rate. Exports however have continued to lag and the mining industry has shown signs of slowing down in the last six months. This will lead to the exchange rate dropping slightly in the near-term. Australia is also a trading hub for Asia and has in the past seen an uplift in GDP and GNP based on the effects of a strong Asian economic growth (Akhtar, Faff, Oliver, 2011). While the Asian nations' economic impact on the global economy is more distributed, it is significant on Australia as the banks in this nation also underwrite many of the development and new venture initiatives throughout Southeast Asia and China (Akhtar, Faff, Oliver, 2011). The mining industry in Australia has a significant impact on exchange rates, as the majority of finished ore and materials are high-value exports (Lonergan, 2004). Due to all of these factors, the Australian exchange rate will continue to stay at a relatively flat growth rate, dropping over the short-term due to Asian economic fluctuations and the mining industry experiencing a slight pause in growth.