Macroeconomics: Current Events, GDP, Labor Market and Price Movements

Running Head: MACROECONOMICS
Macroeconomics
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1MACROECONOMICS
Table of Contents
Current events..................................................................................................................................2
GDP Highlights...............................................................................................................................3
Labor market highlights...................................................................................................................4
Price movements..............................................................................................................................5
References........................................................................................................................................7

2MACROECONOMICS
Current events
Australia being one of the most open economies is affected from economic events that
takes outside domestic economy. Exchange rate is an important macroeconomic variable that
affects both domestic and external economies. Recently value of Australian dollar recorded a
sharp decline before reaching to a higher level. The turmoil in Australian dollar is result of a
number of global event. In the beginning of the trading week, value of Australian dollar
remained mostly unchanged. However, Asian trade has received another round of shock
following selling off in Yuan. With this the lost value of Aussie dollar against US has regained
(businessinsider.com.au 2018). Turnaround in China’s financial market and weakness of US
dollar help to strengthen the value of Australian dollar. The US president Donald Trump has
made two Tweet announcement which significantly affect dollar value. The President is in the
view that European and other Asian trading partners by manipulating currencies and interest rate
reduces competitive edge of US in the international market. With this announcement has also
been made regarding imposition of huge tariff on import from these nations (nytimes.com 2018).
Both Tweets have weighted away value of US dollar.
Movement in exchange rate likely to affect the domestic economy through the channel of
export and import. Appreciation of Australian dollar makes the import cheaper benefitting
consumers and manufacturers using imported inputs (Bernanke, Antonovics and Frank 2015).
This however might hurt Australian export by raising the price of exported items. The ultimate
effect of the event depends on the dynamic movement and volume of export and import.