Exchange rates

• Overall


  the value of one currency for the purpose of conversion to another.

  Fluctuate due to varying demand and supply

  $AUS appreciates - Australian imports are more expensive = reduces competitiveness of businesses, get imports get cheaper

  Monitor exchange rate fluctuations

  A depreciation improves the international competitiveness of Australian exporting business

  When revenues and expenses are transferred between nations, the exchange rate can either increase or decrease their value and affects the business’ ability to meet their financial objectives
• Appreciation of currency fluctuations


  Raises the value of the Australian dollar in terms of foreign currencies. This means that each unit of foreign currency buys fewer Australian dollars. Therefore, an appreciation makes our exports more expensive on international markets but prices for imports will fall. The result of appreciation, therefore, reduces the international competitiveness for Australian exporting businesses
• Depreciation of currency fluctuations


  A currency depreciation has the opposite impact. A depreciation lowers the price of Australian dollars in terms of foreign currencies, therefore, each unit buys more Australian dollars. The result is that our exports become cheaper and the price of imports will rise