The Australian dollar is regarded as a commodity currency. Assuming that demand for iron ore is not
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The Australian dollar is regarded as a commodity currency. Assuming that demand for iron ore is not affected by changes in commodity prices, this implies that an increase in the commodity price drives the external value of the Australian dollar. Panel1 Ais a plot of the commodity price index (CP) that captures the iron ore price. Panel1 Bis a plot of the external value of AUD expressed in terms of the Chinese Yuan (EXRATE) for the period Feb 2010 to Aug 2021.
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Investment Analysis and Portfolio Management
ISBN: 978-0538482387
10th Edition
Authors: Frank K. Reilly, Keith C. Brown
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