Exchange rates play a vital role in a country's level of trade, which is critical to most every free market economy in the world. But it matters on a smaller scale as well. They impact the real return of an investor's portfolio. Here we look at some of the major forces behind exchange rate movements.

Analysis from week 1(13/02-17/02) On the first day of the week, USD/AUD closed at 0.9336. However, there was slightly movement on (14 &15 Feb), as the Greek Parliament passing the austerity vote is only the first step of three towards a Greek bond swap, the risk appetite has increased since the news hit the wires, and the AUD has moved higher with it(0.9356). On 16 Feb, Low demand for Australian Goods and Services from overseas markets. Resulting of a world economic recession, they generally faced low levels of production growth, employment growth, income and expenditure in overseas countries which meant that fewer people could afford to purchase Australian exports. This lead to a depreciation of AUD to 0.9299. Surprisingly, at the end of the week, AUD looked stronger against USD. This was boosted by rising commodity prices, eventually it closed at the same point as it was in the first day of the week.

Analysis from week 2 (20/02-24/02)

US market closed on Monday for Presidents day holiday. This brought USD/AUD currency to decrease to the level of 0.9309. However, US dollar to Australian dollar quotation went up for two trading days in a row, reaching the highest level 0.9410 on February 22nd. This was due to higher inflation rate faced by US economy than that of Australian. At the end of the week, there was large US current account deficit, and finally the US interest rates were dropping and became lower than Australia and the US economy started weakening. As a result, USD/AUD declined slightly to 0.9345.

Analysis from week 3 (27/02-02/03)

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