Trade Weighted Index (1 Viewer)

[FD3S-R]

can someone explain this and answer the questions below:

1. Brielfy explain why an exchange rate can move in the opposite direction the the TWI.


2. Explain the likely impact on the Aus's BOP of the decline in the TWI.

 

[Oink]

1. Because the relative fall in the AUD is less than that of its trading partners, resulting in the rise of TWI.

 

[d_a_n_z]

exchange rate is a bilateral measurement - meaning against all major tradiing parterns, where as exchange rate is generally US. Therefore if US demand moves one way, but everyone else moves eth otehr way --> they will be dif