Which caused the australian dollar to depreciate appreciate

Reference no: EM133614264

Problem: In 2019, an article in the Wall Street Journal noted: "The Australian dollar declined 0.4% against the U.S. dollar . . . after Reserve Bank of Australia cleared the path to an interest-rate cut in June." Reserve Bank of Australia is the central bank of Australia. Source: Sam Goldfarb, "Australian Dollar Declines after RBA Signals Possible Rate Cut," Wall Street Journal, May 21, 2019. Briefly explain the connection between the action of the Reserve Bank of Australia and the decline in the value of the Australian dollar relative to the U.S. dollar. When the Reserve Bank cut interest rates, it lowered lowered raised the return on investing in Australian dollar-denominated assets. As a result, the demand for Australian dollars fell rose fell, which caused the Australian dollar to depreciate appreciate depreciate relative to the U.S. dollar.

Reference no: EM133614264

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