Australia is one of the countries with the largest mineral reserves in the world, and therefore Australia has a large stock of gold, iron, coal and aluminum stocks. Australia also has a huge farm and farmland producing products such as wheat, beef, and wool. And as complementary to the mineral wealth and livestock / farm products, Australia also accentuated the economic life supported by modern industrialization and the highly dominating service sector. Although Australia has economic advantages as mentioned above, Australia has weaknesses because of its geographical isolation and relatively small population. So to overcome this, Australia often imports a large number of products that are not produced domestically.
The Austraila dollar, as Australia's official currency, is the fifth most-used currency in the world. Recorded 7.6% of total world trade and forex trading using Australian Dollar, so it can be said that the Australian Dollar is one of the world's reserve currency. The Australian Dollar (or AUD) is often called "Aussie" by forex traders. This currency is quite popular among forex traders because of the relatively high interest rates in Australia, and government intervention on the forex market is minimal. In addition, another thing that makes the Australian Dollar attractive is the diversification offered over the world currencies and also because of the influence of Asian economies.
Characteristics of AUD / USD Pair
Spreads from forex brokers (on average): 2-4 pips;
Daily range (average): 50-120 pips;
Best Trading Time: Tokyo / Asia Session (06.00 - 15.00 WIB). For more information on this subject please read the Optimum Forex Trading Time article;
The Australian Dollar (AUD) is heavily dependent on the prices of mining and agricultural commodities;
The Australian Dollar (AUD) movement is influenced by China's economic growth as Australia's main export destination.
Factors affecting the movement of AUD / USD pair
RBA Interest Rate and The FED
The first factor affecting the AUD / USD movement is the interest rate. The difference or fluctuation between the interest rate set by the Central Bank of Australia (RBA) and the Federal Reserve (The FED) is the main thing that affects the trading decisions made by the traders. When The FED intervenes on the forex market by changing the interest rate for USD, and the impact on the strength of the USD, we will see a bearish pattern on the AUD / USD chart. And the opposite result will we encounter if the value of USD decreases or the AUD value increases. Surely it is under the assumption that no other market sentiment contributes to the economies of the two countries.
Service and Commodity Sector
The economy in Australia is dominated by the service sector, but Australia's economic growth is heavily dependent on the mining and agricultural sectors. The 2 most important commodities for the Australian economy are coal and iron, where both raw materials are exported to China. The export of this commodity encourages Australia to be one of the countries with the highest gross domestic product (GDP / GDP) value in the world. And directly make China a major export destination for Australia over the past decade. Thus, Australia's economic growth depends on the growth of the industrial sector in China. And because of that, the Chinese economy is one of the important fundamental indicators in identifying the value of Australian Dollar.
On the dependence of the Australian economy for the export of its products, the business cycle also has a major impact on the movement of the Australian Dollar. When Australia is in the peak of exports, then we will meet a fairly consistent bullish rally, and vice versa when world crude mineral prices decline or when the amount of imports far exceeds exports the bearish rally will appear; Whether in the form of a current trend correction or a reversal. This movement is quite unique when compared to other world currencies (such as EUR, GBP, or USD); Where the value of other currencies will increase when market conditions are sluggish, as traders dilute a number of shares held to maintain the value of investment funds they hold / manage.
The service sector alone accounts for 68.8% of Australia's gross domestic product, spearheading the financial segments, tourism, mass media, education and logistics. So that economic reports that are born and or affect the development of this sector will have a direct effect on the movement of the Australian Dollar value.
The Austraila dollar, as Australia's official currency, is the fifth most-used currency in the world. Recorded 7.6% of total world trade and forex trading using Australian Dollar, so it can be said that the Australian Dollar is one of the world's reserve currency. The Australian Dollar (or AUD) is often called "Aussie" by forex traders. This currency is quite popular among forex traders because of the relatively high interest rates in Australia, and government intervention on the forex market is minimal. In addition, another thing that makes the Australian Dollar attractive is the diversification offered over the world currencies and also because of the influence of Asian economies.
Characteristics of AUD / USD Pair
Spreads from forex brokers (on average): 2-4 pips;
Daily range (average): 50-120 pips;
Best Trading Time: Tokyo / Asia Session (06.00 - 15.00 WIB). For more information on this subject please read the Optimum Forex Trading Time article;
The Australian Dollar (AUD) is heavily dependent on the prices of mining and agricultural commodities;
The Australian Dollar (AUD) movement is influenced by China's economic growth as Australia's main export destination.
Factors affecting the movement of AUD / USD pair
RBA Interest Rate and The FED
The first factor affecting the AUD / USD movement is the interest rate. The difference or fluctuation between the interest rate set by the Central Bank of Australia (RBA) and the Federal Reserve (The FED) is the main thing that affects the trading decisions made by the traders. When The FED intervenes on the forex market by changing the interest rate for USD, and the impact on the strength of the USD, we will see a bearish pattern on the AUD / USD chart. And the opposite result will we encounter if the value of USD decreases or the AUD value increases. Surely it is under the assumption that no other market sentiment contributes to the economies of the two countries.
Service and Commodity Sector
The economy in Australia is dominated by the service sector, but Australia's economic growth is heavily dependent on the mining and agricultural sectors. The 2 most important commodities for the Australian economy are coal and iron, where both raw materials are exported to China. The export of this commodity encourages Australia to be one of the countries with the highest gross domestic product (GDP / GDP) value in the world. And directly make China a major export destination for Australia over the past decade. Thus, Australia's economic growth depends on the growth of the industrial sector in China. And because of that, the Chinese economy is one of the important fundamental indicators in identifying the value of Australian Dollar.
On the dependence of the Australian economy for the export of its products, the business cycle also has a major impact on the movement of the Australian Dollar. When Australia is in the peak of exports, then we will meet a fairly consistent bullish rally, and vice versa when world crude mineral prices decline or when the amount of imports far exceeds exports the bearish rally will appear; Whether in the form of a current trend correction or a reversal. This movement is quite unique when compared to other world currencies (such as EUR, GBP, or USD); Where the value of other currencies will increase when market conditions are sluggish, as traders dilute a number of shares held to maintain the value of investment funds they hold / manage.
The service sector alone accounts for 68.8% of Australia's gross domestic product, spearheading the financial segments, tourism, mass media, education and logistics. So that economic reports that are born and or affect the development of this sector will have a direct effect on the movement of the Australian Dollar value.
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