Yahoo Finance data

a) For this part, I have used the Yahoo Finance data to to make this grahp which is four year period from 30 Jube 2016 to 1 July 2020. I have divided into four parts, the time period of Graph 1 is from June 30 2016 to 1 July 2017. The Graph B is from 1 July 2017 to 1 July 2018. The Graph C is from 1 July 2018 to 1 July 2019. The Graph D is 1 July 2019 to 1 July 2020. In addition, I provide the daily graph of July 2020.

 

Graph 1 from 30 June 2016 to 1 July 2017

 

 

 

Graph 2 from 1 July 2017 to 1 July 2018

 

 

Graph 3 from 1 July 2018 to 1 July 2019

 

Graph 4 from 1 July 2019 to 1 July 2020

 

Daily Graph of July 2020

 

 

 

b)

 

The peaks between 30 June 2016 and 1 July 2020

 

 

The troughs between 30 June 30 and 1 July 2020

 

 

 

The major troughs in July 2020

 

 

The major peaks in July 2020

 

In this parts, I had highlighted the major peak of 4 year period which is from 30 June 2016 to July 1 2020. It is the highest point in four year period. It is on 20 Oct 2016. The exchange rate of AUD to GBP is 0.6284. However, the major trough is on 3 April 2020. The lowest point from 30 June 2016 to 1 July 2020 is 0.4891. These data are from Finance Yahoo (2021). In addition, I also highlight the major peak and trough of daily graph of July in 2020. The trough point of daily graph in July 2020 is 0.5491, the peak point is 0.5606.

 

 

 

 

c)

 

In this part, this report will use a variety of sources to identify the reason of major peaks or troughs and use different aspects to analyze what causes major peaks or troughs. First, this report would identify the major peak and trough between 2016 and 2020 then this report continue to analyze major peak and trough of daily graph in July 2020.

 

The major peak of exchange rate of AUD to GBP in 2016 has two aspects to analyze. It is economic and political. For economic sides, PARLIAMENT of AUSTRALIA(2019) states exports of goods and services rank UK as seventh largest export market of Australia in 2015-2016, and representing 45 percent of total export of Australia to European Union. In addition, there is no the other EU countries featured in the top 15 market of Australia in 2015 to 2016 (Australian Institute of International Affairs, 2017). As British exit the European Union, Australia need to consider the new agreement between Europe and Australia, also British. European Union may put more pressure on new agreement between Europe and Australia because European Union may pay tariff to United Kingdom after the exit of British. In other words, British would give some discounts to Australia in new agreement. Also, the export of Australia to United Kingdom had increased significantly since 2014. The export of Australia to United Kingdom is 8,382 billion dollars but it is 14,978 million dollars in 2016(Department of Foreign Affairs and Trade, 2016). British has strong demand into product or service of Australia. In other words, the power of AUD has increased.  These had caused the fall in British Pound. For political sides, BAS (2019) indicates that the level of trust in government has fallen way quietly noticeably after leaving European Union. This causes the fall in GBP.

 

The major trough of exchange rate of AUD to GBP in 2020 has two aspects to analyze. It is from political sides and economic sides. From political sides, Australia has ruled out a post-Brexit agreement that involves visa-free travel and work arrangement and Australia has banned Huawai from participating in the nation’s own 5G network (Gocardless, 2019). This way decrease the export of Australia to Kingdom, this had causes the fall in the AUD. For economic sides, ABC (2021) indicates that a call for a COVID-19 investigation has destroys relationship between China and Australia. This affect the several significant export industries because China is the largest trading partner for Australia. These cause the fall in the AUD. Therefore, AUD to GBP reaches the lowest point in 3 April 2020.

 

d)

 

It is obvious that if Australia continue to make trade war with China, Australia economy would continue to fall down. According to POUND STERLING FORECAST (2020), China has slashed its imports of Australian wheat to a nine-year low of 880 tonnes in November 2020. In addition, the AUD-GBP will future decided largely by the coronavirus spread and lockdowns in the UK (POUND STERLING FORECAST 2020). According to BBC (2021), more than 33 million people in the UK had received at least one dose of a coronavirus vaccine. British Pound would increase and AUD would decrease but it also need to consider the new agreement with European Union. The new agreement between UK and EU also increase the value of British Pound.

 

2.

 

 

According to RBA (2021), the Australia Dollar Trade-weight Index is increasing since 2019. Although it is increasing since 2019 but it would fall down due to the freezing point relationship between Australia and China. The Trade-weighted index is based on the average weight value of the Australia dollar with respect to a basket of currencies (PARLIAMENT of AUSTRALIA, 2021). The largest trading import and export is China, this would cause the fall in Trade-weighted index due to the freezing point relationship between China and Australia.

 

 

 

 

 

 

 

 

Reference List

Yahoo Finance 2021, AUD-GBP Charts, Yahoo, viewed 25 April 2021

https://finance.yahoo.com/quote/AUDGBP%3DX/chart?p=AUDGBP%3DX

 

Yahoo Finance 2021, AUD-GBP Historical Data, Yahoo, viewed 25 April 2021

https://finance.yahoo.com/quote/AUDGBP%3DX/history?p=AUDGBP%3DX

 

PARLIAMENT of AUSTRALIA 2021, Overview of Australia’s trade with the United Kingdom, PARLIAMENT of AUSTRALIA, viewed 25 April 25

https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Foreign_Affairs_Defence_and_Trade/tradewithUK/Interim_Report/section?id=committees%2Freportjnt%2F024101%2F25066

 

GOCARDLESS 2019, What impact will Brexit have an on Australian Business, Payments Regulation Services, viewed 25 April 25 2021

https://gocardless.com/en-au/guides/posts/brexit-impact-on-australian-businesses/

 

Australian Institute of International Affairs, Brexit and Australia: The Way Forward, Australian Institute of International Affairs, viewed 25 April 2021

https://www.internationalaffairs.org.au/brexit-and-australia-the-way-forward/

 

British Social Attitudes, Political consequences of Brexit, British Social Attitudes, viewed 25 Apirl 2021

https://www.bsa.natcen.ac.uk/media/39374/bsa37_political_consequences_brexit.pdf

 

ABC News, Australia called for a COVID-19 probe China responded with a trade war, ABC News, viewed 25 April 25 2021

https://www.abc.net.au/news/2021-01-03/heres-what-happened-between-china-and-australia-in-2020/13019242

 

POUNDSTERLING FORECAST 2020, AUD to GBP Rate Higher as Virus Outweighs Brexit, POUND STERLING FORECAST, viewed 25 April 2021

AUD to GBP Rate Higher as Virus Outweighs Brexit

 

POUNDSTERLING FORECAST 2020, Pound Sterling Forecast –Will GBP rise or fall in June , POUND STERLING FORECAST, viewed 25 April 2021

https://www.poundsterlingforecast.com/2020/06/pound-sterling-forecast-will-gbp-rise-or-fall-in-june/

 

Reserve Bank of Australia 2021, Australian Dollar Trade-weighted Index, viewed 25 April 2021

https://www.rba.gov.au/chart-pack/exchange-rates.html

 

BBC News 2021, Covid vaccine: How many people in the UK have been vaccinated so far?, viewed 25 April 2021,

https://www.bbc.com/news/health-55274833

 

BBC News 2021, Australia provokes China anger over scrapped deals, BBC News, viewed 25 April 2021

https://www.bbc.com/news/world-australia-56840299

 

PARLIAMENT of AUSTRALIA 2021, Trade Weight Index, PARLIAMENT of AUSTRALIA, viewed 25 April 25

https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/MSB/feature/EXCHANGE

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