How the US-Australian Trade Relationship Affects the AUDUSD
The AUDUSD is a major currency pair, as it is the country’s main export. About a third of Australian exports are shipped to China. Consequently, the economy of China can directly impact the AUDUSD. However, Australia has other important trading partners as well. The Free Trade Agreement between the US and Australia, ratified in 2005, has resulted in more than $1 billion in direct US investment into the country. Moreover, US exports to the nation have more than doubled since the Free Trade Agreement was ratified. Besides, most commodities are denominated in US dollars, and therefore, the AUDUSD can go either way in any case.
The AUD/USD currency pair is highly affected by the US-Australian trade relationship. Since the US is one of Australia’s largest trading partners, the Australian dollar can fluctuate in value in response to changes in demand for Australian commodities. Additionally, the interest rate differential between the two countries can affect AUD/USD rates. As such, it is important to pay attention to the latest economic news from the US and Australia. While the Australian economy is doing well, the United States is still a major trading partner for AUD/USD.
The AUD/USD currency pair is part of the Majors, a group of currency pairs that are the most traded in the world. While its popularity initially surged with the interest rate differential, its popularity has slowed with the waning of the global economy. Currently, the AUD/USD has a low interest rate, which means that it is the perfect time to enter and exit a AUDUSD trade.
The AUDUSD has a negative correlation with the USD, which has a greater positive correlation with the US. However, the USD is a key factor influencing the Aussie, so traders should be careful before making any significant gains. The USD should continue to remain in a downtrend and not reverse. A trend that starts at the bottom of a cycle may reverse. While the AUDUSD continues to fall, it could also bounce up from its low.
While the US Federal Reserve sets monetary policy, Australia’s Federal Reserve has a dual mandate. Both of these governments aim to keep structural unemployment low inflation. The AUD/USD currency pair tends to move with the S&P500 in the US. The monetary policies of these countries are often reflected in their currencies. These factors can have a large impact on the AUD/USD. So, if the USD moves up or down, it is best to avoid trading in a downtrend.
The AUDUSD is most likely to move if the Australian economy experiences a downturn. If the Australian economy is experiencing a recession, the currency will fall even further. Moreover, the AUDUSD may move higher if the U.S. is in an economic recession. Both of these factors can impact the AUDUSD. The Aussie is more attractive to investors with lower interest rates. They both are a major reason for the dollar to rise in a downturn.
AUDUSD is a volatile currency pair. It tends to remain relatively stable throughout most trading sessions. In fact, the currency pair has a positive correlation with gold and NZDUSD. It has a negative correlation with USDCAD, which means that it moves in the opposite direction. In both cases, this means that the currency has positive and negative effects on each other. A strong economy will make it more susceptible to inflation.
Apart from these factors, AUDUSD is impacted by political and geographical factors in Australia. Similarly, the interest rate influences it, which are in turn influenced by the country’s currency’s growth rate. If you are a beginner in forex trading, the news can help you determine which strategies work best for you. Just keep in mind that the AUDUSD is also subject to major fluctuations and can go up and down dramatically.
Despite a large range of factors that affect the AUDUSD, the currency has a strong correlation with the US dollar and is a strong currency pair in the same country. Its geographical position makes it an ideal choice as it links two expanding and influential economies. With a forex contract, individuals can trade the Aussie dollar and the US dollar pairing. They can speculate on price differences, and take profit from this. They may also consider investing in the Australian commodities market.