Part one of term paper
What is an exchange rate? What factors determine the exchange rate for the Australian dollar? An exchange rate is the ratio at which a country's currency exchanges for the currency of another country. Exchange rates are typically expressed as the foreign currency equivalent of one unit of domestic currency. The exchange rate between Australia ...

Part two of term paper
... forces of supply and demand. In other words, the rate moves freely in response to competitive market forces. Demand and supply are determined in terms of overseas currencies. Those who have foreign currency and want to buy dollars with it provide the demand for Australian dollars. These include overseas people who want to buy our exports, tourists coming here, overseas people wanting to lend money here, or buy shares or property here, overseas firms setting up branches here or expanding ...