AUDUSD – What Are the Key Factors That Determine the Value of AUDUSD?
AUDUSD is one of the largest currencies in the world and has been trading steadily over the past few years. With trade-relations between Australia and the US on the rise, there is a good chance that the currency could remain strong for the foreseeable future. But, there are some factors to keep in mind.
Commodity prices have a huge impact on the Australian dollar. Historically, a rise in commodity prices has resulted in an increase in demand for the Aussie Dollar. As a result, the supply of the Aussie has decreased, leading to a strong increase in the value of the Aussie.
Similarly, low commodity prices have a negative effect on the AUD/USD pair. During the recent slump in the commodity markets, Australian exports of iron ore and coal slumped. However, the recovery in the commodity markets has boosted the Australian dollar.
Another big factor affecting the value of the AUD is the business environment in China. This country is a major trade partner for Australia, and has been a key driver in its continued growth.
The Australian economy is heavily reliant on commodities. Iron ore and coal are two of the largest exports of the nation. Furthermore, Australia is in a prime location for trading with Asian countries.
Interest rate differential
The interest rate differential between the AUD and USD is a key factor in determining the value of this currency pair. While both countries have historically strong economies, the relative power of the two currencies may be a function of their respective central banks.
The AUD is traditionally a commodity currency that is heavily influenced by trade with Asia. Australia has an abundance of natural resources and is in a prime location to trade with other Asian nations.
There are many factors that contribute to the AUD/USD exchange rate, but it is often a function of interest rates in the two countries. Specifically, the United States has a relatively low interest rate, which means that buying the Australian dollar will be less expensive. This makes the AUD a more attractive investment.
Trade-relations between Australia and the US
Australia and the United States enjoy a strong relationship. Both nations share many cultural and democratic values. They also enjoy a very close relationship on the trade front. In addition to their traditional ties, the two countries have signed a variety of important mutual legal assistance and science and technology agreements.
The Australia-US free trade agreement was approved by the Australian Parliament on August 12, 2004. President Bush visited Australia in October 2003. Since the agreement was signed, both sides have become more integrated into each other’s economies.
The United States is the largest investor and economic partner in Australia. It is the third largest destination for Australian exports.
Trade between the two countries totals more than $28.9 billion in 2018. There are strong economic, academic and cultural ties between the two countries.
The Australian Dollar (AUD) is one of the most widely traded currencies. It is also the fifth most traded currency in the global foreign exchange market. Although Australia has an important trading relationship with the United States, the value of the AUD is not always influenced by US interest rates.
Australia’s economy is largely based on commodities. However, rising commodity prices can have a negative effect on the economies of developing nations. This can lead to the fall of the AUD/USD pair.
Commodity price crashes have piled pressure on the AUD/USD since 2011. Since 2011, the pair has dropped below an all-time low of 0.4855. That level was reached on March 1st, 2001.
The Australian economy has recovered, though there are still risks for the Aussie in the short term. Recent upside moves have stalled at key levels. A crucial resistance level is November’s swing high at 0.7371.
The Australian dollar is a commodity currency, and the value of this particular commodity can vary from day to day. Its price is also influenced by economic and political factors, which are often not well understood by the general public.
As a result, the AUD/USD exchange rate has seen a number of highs and lows in recent weeks. With the Reserve Bank of Australia meeting on November 1 nearing, the currency may see some headwinds.
One of the most important aspects of any currency is its strength. In the US, a strong economy can be reflected by the strength of the dollar. Hence, the Australian dollar’s value is a direct function of the economy and monetary policy.
While a number of factors play into the AUD/USD’s fate, the main culprit is the Federal Reserve. Over the past few years, the Fed has stepped up stimulus measures to counter signs of market dysfunction.