The popularity of AUD Currency Trading among currency traders cannot be separated from Australia’s geography, geology, and government policies. Companies are provided with high-demand natural resources including diamond, gold, oil, iron ore, agricultural produce, coal, nickel, and uranium, by the country’s geology.

Government policies have resulted in fairly stable economies and governance, a western approach to business, stable high interest, and the rule of law that has not always been the hallmark of the region. In developed countries, Australia often has the highest interest rates.

Nonetheless, Australia’s housing bubble cannot be prevented even with those relatively high figures. It should also be noted that the RBA is often facing the uncertainty cycle that affects the country’s capital account and trade balance.

Behind the AUD Currency Trading, the Economy of Australia

The GDP of Australia which is measured in the dollar, is at the bottom of the list of major currencies. Australia is heavily dependent on commodities among developing countries. More than 8% of the country’s GDP is represented by mining with a large emphasis on nickel.

Agriculture is also an important component of AUD Currency Trading, as more than 2% of GDP is linked to agriculture with output in large percentage leaving the country. The resource wealth of Australia has not positively impacted the entire country’s economy.

Even with its economic liberalization policies since the early 1980s, Australia has never succeeded in developing a rapidly growing domestic manufacturing sector. The country has foreign debt at a fairly high level and a current account deficit in a large amount.

Australia is also experiencing its own national housing bubble, and in the developed world, Australia has the highest interest rates. By knowing the indicators and factors to watch for, you can keep up with the fast-moving and competitive world of forex. 

Drivers of AUD Currency Trading

Compared to real market values, calculating the correct foreign exchange rates with a designed economic model are notoriously inaccurate, partly since economic variables in a small number are the base of that economic model even sometimes just one such as interest rates.

However, a much larger amount of economic data is incorporated by traders into their decisions and their own speculative views can move prices as a stock can be moved by an investor pessimism or optimism above or below the suggested value of the fundamental. 

Key economic data include industrial production, the release of GDP, inflation, retail sales, trade balance, and industrial production. They come out periodically and many sources of financial information, as well as many best forex brokers, make this information available free of charge.

An investor should also pay attention to information on daily news flow, interest rates (include: scheduled central bank meetings), natural disasters, new government policies, elections, and employment information can all significantly affect the exchange rates.

Other Factors That Drive AUD Currency Trading

However, with Australia, other factors that also need to be considered. Commodities (both grains and metals) are driving the Australian economy, and reports on weather, crop planting, metal prices, and mining products can all drive the Aussie dollar.

Fortunately, this data can be found on the internet since the ABARES provide regular reports. Accordingly, the Aussie dollar’s strength is tied closely to its exposure to the commodity cycle and Asia. Demand in Japan, China, and India has driven the Australian dollar up in previous cycles.

In general, in most developed economies, recessionary pressures are created by the higher commodity prices. So, when traders worried about the sustainability and the health of economies in Japan, North America, and Europe because of high resource prices, usually, Australia looks healthier.

AUD is among popular currencies in forex trading. But, to be able to trade it, you must have deeper skill and knowledge of forex trading. With didimax forex broker you can trade various currencies easily such as AUD Currency Trading.