In this thesis, factors influencing short run movements in Australian currency exchange rates were examined. The period of the study comprised 5 years prior to the floating of the Australian dollar and 5 years subsequent thereto. No evidence of any significant relationship between changes in the current account balance (or components thereof) and exchange rate movements, was found. The predictions of the uncovered interest rate parity theory were not supported. There was a significant relationship between certain "change in interest rate differential" variables and exchange rate changes, but the direction was the opposite of that expected (an increase in the size of a positive interest rate differential was actually associated with a depreciation in the Australian currency). It may be that Government actions have been responsible for this effect, which tended to be stronger than for other exchange rate determinants. There was also a strong relationship between movements in an export commodity price index, in U.S. currency, and exchange rate movements. Prima facie evidence of currency market inefficiency was found, with the export commodity price index, in U.S. currency, predicting exchange rate movements in the following month. There was also evidence of export price indices leading exchange rate movements by 3 months. The use of changes in price indices, in Australian currency terms, to explain concurrent exchange rate movements, was found to be misleading, however.