Impacts of Ongoing Global Geopolitical and Economic Turbulences on Exchange Rates: A Case Study of the Australian Dollar
Impacts of Ongoing Global Geopolitical and Economic Turbulences on Exchange Rates: A Case Study of the Australian Dollar
Author(s): Amin SokhanvarSubject(s): National Economy, Supranational / Global Economy, Energy and Environmental Studies, Economic policy, Environmental and Energy policy, International relations/trade, Financial Markets, Geopolitics, Peace and Conflict Studies, Russian Aggression against Ukraine
Published by: Ekonomický ústav SAV a Prognostický ústav SAV
Keywords: geopolitical risk; commodity currencies; exchange rates; energy price shocks;
Summary/Abstract: This research investigates the impact of the 2022 Ukraine conflict and subsequent economic sanctions on Russian exports on global supply chains and energy prices. Utilizing daily data from 2022, this study employs time-varying Granger causality and DS-ARDL techniques to analyze the effects of these events on the foreign exchange market. The results reveal a significant relationship between energy price shocks and exchange rates, with the Australian dollar appreciating against Euro, British pound, and Japanese yen. The study suggests that while major consumers of raw materials and energy, like Japan and European nations, face adverse effects due to the conflict, Australia could potentially benefit due to its role as a primary exporter of commodities. These results have noteworthy implications for policymakers and investors, highlighting the need for strategic reassessment of geopolitical risks and their direct and indirect effects on financial markets and economies.
Journal: Ekonomický časopis
- Issue Year: 71/2023
- Issue No: 06-07
- Page Range: 405-427
- Page Count: 23
- Language: English
