Tips For You The Trading Pair AUDUSD
Australia is one of the most developed countries in the world. Approaching the developed world. So the economy is very competitive and being the leader in the capitalist world. Australian currency is AUD or Australian dollar or often called Aussie and become popular among traders and forex investors to become the object of trading. Understanding Australia (the economic side) will provide tips for you who are trading AUDUSD.
AUDUSD is the main currency (pair major) because there is a USD component behind the pair. The status of the US dollar reserve currency makes AUDUSD pair very important in price movements in the forex platform. AUDUSD trading pair is not like a linear straight line even though it is like a regular USD pair. AUDUSD has special characters outside its central bank interest and monetary policy. Then what distinguishes the pair AUDUSD with other pair?
AUDUSD is often a carry trade object because it has a positive swap. The trading account will be swapped if the trading position is overnight. Swap is the difference in interest rates but this difference is not through the usual mathematical calculations to find the difference in interest rates of both currencies. The calculations are a bit complicated.
Trader will be subject to swap if negative and get swap if positive. Positive swaps trigger carry trade and are usually done by big players.
In addition to carry trade, the movement of AUDUSD pair is often also influenced by precious metals and other commodities. The Australian economy produces in very large quantities and sends it around the world. Aussie is often called Commodity-based currencies as well as oil-based USDCAD.
If the gold price rises then the Aussie will strengthen and rise if correction occurs. Vice versa. There are many factors affecting commodity prices including demand and supply chains that will affect Australia’s trade balance value. Then there is the shift in the economy and policy of the central bank at each meeting.
Next, is the value of exports to China which reached up to 30%. This is huge. So it can be said that Australia has a strong dependence on the Chinese economy. If the Chinese economy is booming, then the demand for Australian goods is more so that commodity prices will increase that will push the Aussie up. Conversely, if the Chinese economy sags, the Aussie will weaken.
Well, in addition to the RBA central bank policy related to interest rate and monetary policy, AUDUSD pair is influenced by the factors mentioned.