The value of the Australian dollar is determined by foreign exchange markets and the relative demand and supply of the currency. Demand is created by financial inflows in the balance of payments, while supply is created by financial outflows. Foreign investment flows are therefore crucial in determining the value of the Australian dollar. The document outlines several factors that influence the short, medium, and long-term value of the Australian dollar. In the short-term (days), speculation drives currency movements. In the medium-term (months), key factors include interest rate differentials, commodity prices and exports, terms of trade, risk environment, and Australia's economic performance. Long-term (years) movements reflect relative inflation rates and purchasing power parity