Financial Instruments Assignment

Added on - 12 Nov 2020

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FINANCIAL INSTRUMENT
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1Forecasting the inflations rate changes in Australia and New Zealand..................................1Forecasting the Interest rate movements in Australia and New Zealand...............................3Forecasting Economic growth in Australia and New Zealand over the year 2019................5Justification:...........................................................................................................................6CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8
INTRODUCTIONFinancial instruments are the main concerns in any economy which are required to begoverned and reformed by economists for better stability. In the present report there will beestimation of interest, inflation and exchange rate in Australia and New Zealand. Thisforecasting will bring accurate information regarding economic growth of these country andimpacts of such instruments in growth and development. Along with this, report will alsodemonstrate influences of these elements in financial market of both countries.MAIN BODYForecasting the inflations rate changes in Australia and New ZealandInflation refers to changes in consumer price index which determines through rise in costof various commodities. During the period of global financial crisis there has been rise in rates ofgoods which are being imported by a nation from another. The rise in taxes has reverselyaffected rise in prices of products consumed by individual. If a country has higher inflation ratethan it will negatively affect currency value(Langcake and Robinson, 2018). Reduction ordownfall of GDP as well as exchanges will bring instability in that economy which turns intobring crisis. However, below are listed table and graphical presentation of inflation rate changesin Australia and New Zealand over the period along with their forecasts.Forecasted inflation rate in Australia:QuarterActualConsensusForecastQ3 20171.81.954Q4 20171.91.9106Q1 20181.91.9115Q2 20182.11.979Q3 20182.122Q4 2018212Q1 20191.87Q2 20191.77Q3 20192.13Figure1: Inflation rate forecast of Australia1
Figure2: Trendline of inflation rate in AustraliaForecasted inflation rate in New Zealand:QuartersActualConsensusForecastedQ3 20171.91.712Q4 20171.61.933Q1 20181.11.630Q2 20181.51.920Q3 20181.78Q4 20181.912Q1 20191.86Q2 20191.64Q3 201924Q4 20192.24Figure3: Inflation rate forecast of New Zealand2
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