From 2010 until early 2013, the Australian dollar appreciated against many major currencies and at times exceeded parity with the US dollar. The effect on Australian businesses was quite disparate with significant gainers and losers.
You are required to:
(a) Discuss the arguments for and against floating exchange rates. Concepts & theories
(b) The current Australian dollar exchange rate regime is a managed float exchange rate system with minimum government or central bank intervention. Explain with assistance of examples, three broad methods (Free float, Managed float, fixed peg or Adjustable peg) that a central bank or a government may use to influence the value of a currency.
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