Prepare a brief report showing application of cross rates for the Australian Dollar and the Turkish Lira in terms of the Chinese Renminbi.

Topic: Cross rates of Australian Dollar (AUD) and Turkish Lira (TRY) against the Chinese Renminbi (CNY)

You are tasked with preparing a brief report showing application of cross rates for the Australian Dollar and the Turkish Lira in terms of the Chinese Renminbi. You are to present a report of no more than 500 words in length. Alternatively, you may present your results as a PowerPoint presentation with no more than 10 slides in total.

Background Information
The daily movement of the Australian Dollar (AUD) in terms of the Chinese Renminbi (CNY) is shown below in Figure 1 for the period 18 Jan 2017 to 18 Jan 2022. Here the term AUD/CNY can be interpreted to mean 1 Australian Dollar is buying x number of Chinese Renminbi’s. Therefore, as at 18 Jan 2022, using the diagram below, 1 Australian Dollar was buying 4.56488 Chinese Renminbi.

Figure 1: AUD/CNY

Source: Developed from https://www.xe.com/currencycharts/?from=AUD&to=CNY&view=5Y
The daily movement of the Turkish Lira (TRY) in terms of the Chinese Renminbi (CNY) is shown in figure 2 for the period 18 Jan 2017 to 18 Jan 2022. Here the term TRY/CNY can be interpreted to mean 1 Turkish Lira is buying x number of Chinese Renminbi. Therefore, as at 18 Jan 2022, using the diagram on figure 2,

1 Turkish Lira was buying 0.469323 Chinese Renminbi.

Figure 2: TRY/CNY

Source: Developed from https://www.xe.com/currencycharts/?from=TRY&to=CNY

The information you present in the report is up to you but there are some questions that must be specifically addressed. These are listed below and must be incorporated into your report/presentation.

⦁ Comment in no more than 2-3 paragraphs on the exchange rate movement of each of the two chosen currencies (i.e. the Australian Dollar and the Turkish Lira) over the time period shown and make any comments as to possible explanatory causes you believe may have contributed to any noticeable patterns, peaks or troughs in the diagrams shown. Note* While Covid-19 certainly had an impact on exchange rates, it must be remembered that this was a relatively recent event (2020 -2022). Your discussion should therefore be inclusive of the entire 5 years shown on the graphs.

⦁ Comment on whether the Australian Dollar and the Turkish Lira have appreciated or depreciated over this period in terms of the Chinese Renminbi. Justify your analysis with relevant calculations using the information shown below (which was taken from the diagrams).

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