The Australian dollar (AUD) is a popular currency in the global forex market. It is the fifth most traded currency. Several factors contribute to the popularity of this currency. The country has a large range of valuable commodities, is strategically located in relation to the Asian markets, and its interest rates have remained low.
There are few major influencing factors that influence the AUD/USD currency pair, but demand for raw materials in the world market, and the Central Bank’s monetary policy affect its value. This currency pair’s price chart also has visible patterns and resistance/support levels. With a clear understanding of these trends, traders can profit from them.
The AUDUSD is closely tied to commodity prices and global growth. Investors can reduce their exposure to risk by trading CME listed FX futures and options. These products provide precise risk management for AUD/USD exposure and include convenient monthly, weekly, and quarterly futures. Furthermore, they allow for flexibility in trading through the central limit order book.
Moreover, the AUD/USD is affected by geopolitical conflicts in the US and Australia. While the US is one of the world’s leading oil producers and consumers, Australia is more dependent on agricultural and mineral exports. Energy and commodity prices have increased over the years, which has also impacted the AUD/USD exchange rate. Despite the risks, both countries are seeking to strengthen their currencies.
Another factor influencing AUD/USD is the interest rate differential between Australia and the U.S. The Australian dollar is often favored by countries with lower interest rates, and vice versa. Consequently, when Australian interest rates are higher than those in the United States, it makes it more attractive. And if the US interest rate changes, so does the Aussie dollar.
The Australian dollar has an important role in the global forex and commodities markets. China is the biggest consumer of Australian exports. Therefore, the global price of oil and gold will impact the AUDUSD. In addition, the Australian dollar is also heavily affected by the central bank’s actions. The RBA board meets eleven times a year, and its minutes are published after two weeks. If the board makes dovish statements, the AUDUSD will weaken. If the RBA releases hawkish statements, the AUDUSD will rise.
The AUD/USD currency pair is highly dependent on Australian-US trade relations. The two countries are trusted trade partners and have strong economic ties. The Australia-US Free Trade Agreement was ratified in 2005 and since then, US exports to Australia have more than doubled. Additionally, most commodities are priced in US dollars.
While many factors influence the AUD/USD, US economic data plays an important role. For example, the Chinese GDP, manufacturing PMIs, industrial production, and retail sales are all important. The AUD/USD currency tends to react quickly to these events. A trader can use various technical analysis tools and strategies to trade with AUD/USD. If you want to learn more about the currency market, check out our comprehensive AUD/USD trading guide.
The AUD/USD currency pair correlates with the CAD pair, although the latter has sharper swings. It is also correlated with gold. Both the metal and the currency have strong correlations, although the AUD/USD currency pair is more volatile during the Asian trading session. Moreover, the correlation between these currencies varies between -1 and +1 and can change over time.
The AUDUSD currency pair is among the most popular and widely traded currencies in the world. During the Asian trading sessions, the pair’s volatility encourages traders. The price of AUD/USD is largely influenced by commodity prices. It is also known as the Aussie. There are a number of forex brokers that offer AUD/USD and the pair is usually traded within a one to three pip spread range.
The Australian dollar is dependent on the prices of iron ore and coal, which are the two largest exports in the country. As a result, when these commodities are in low demand, the Australian dollar will fall as well. This will weaken the Australian dollar and impact the Australian economy. The country’s economy relies heavily on China’s business climate, so a drop in demand from China will result in lower prices and a weaker Australian dollar.