Australian dollar vs the green buck
... An increase in the supply of dollars would cause its price to decline (the dollar devalues) while an increase in demand for dollars would cause its price to rise (devaluation of other currencies by comparison to the dollar). ... Fundamentals such as interest rates and commodity prices had initially influenced the AUD until late 1999, but later the movement in the currency has been influenced by the better performing Australian economy. ... Relative strength of the Australian dollar Political According to BusinessWeek Online (2003), the Australian dollar has risen by 10 percent against the greenback to about 59 cents since August 2002. ... Thus the Australian dollar was perceived as a safe haven by investors to steer clear of the possible financial market turmoil (BusinessWeek Online, 2003). By the end of March, 2003, the Australian dollar had held ground when investors realized that the Iraqi war would take longer than earlier anticipated (The Australian, 2003). Another possible reason for the strengthening of Australian dollar in the past 18 months, is the terrorist attacks in the U. ... (MarketCurrents Online,2003) Economical The heave in home building has contributed to the strengthening of the Australian dollar due to relatively low interest rates and government subsidies.