Economics, Econometrics and Finance
4 years ago

Study Reveals Impact of Terms of Trade on US/A/A/A Exchange Rate

EUROPEAN RESEARCH STUDIES JOURNAL
Modelling the US$/A$ Exchange Rate Using Cointegration Techniques
Costas Karfakis, A.J. Phipps

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The US/A/A/A exchange rate is influenced by Australia's terms of trade and relative price levels, but not by interest rate differentials. Changes in the terms of trade impact the exchange rate significantly. Expected inflation rates affect short-term changes in the exchange rate.