How to Trade the Australian Dollar (AUD)?
The Australian dollar (AUD) is the currency of Australia and is traded in the Forex market. In this article, Headway experts share what to pay attention to when you want to trade AUD. Learn more about the Australian dollar and trade it on Headway!
What to monitor to trade AUD?
To trade AUD profitably, keep an eye on important economic indicators and news releases from Australia, such as GDP growth, employment data, interest rate decisions by the Reserve Bank of Australia (RBA), and trade balance figures. These factors can significantly impact the value of the AUD. You can find these events in the Headway economic calendar.
Moreover, you should monitor commodity prices. The Australian economy is closely tied to commodity exports, particularly iron ore and coal. Changes in commodity prices can have a significant influence on the AUD. Monitoring commodity markets and global economic trends can provide insights into potential movements in the currency.
The AUD is considered a risk-sensitive currency, meaning it tends to perform well in periods of global economic optimism and risk-on sentiment. Factors such as market volatility, geopolitical events, and global economic conditions can affect the AUD’s performance.
The AUD has a positive correlation with commodity currencies like the Canadian Dollar (CAD) and the New Zealand Dollar (NZD) due to their similar economic characteristics. It also has a negative correlation with safe-haven currencies like the US Dollar (USD), Japanese Yen (JPY), and Swiss Franc (CHF). Monitoring these correlations can help determine potential trading opportunities.
How does AUD relate to other currencies?
The AUD is commonly traded in several currency pairs, including:
AUDUSD. This pair is known as the “Aussie Dollar” and is one of the most actively traded currency pairs globally.
AUDJPY. This pair combines the AUD with the Japanese Yen, representing the relationship between the Australian and Japanese economies.
AUDNZD. This pair reflects the relationship between the Australian and New Zealand economies.
When trading AUD, it’s essential to conduct thorough technical and fundamental analysis to identify potential entry and exit points. Utilize technical indicators, chart patterns, and risk management strategies to make informed trading decisions. Additionally, stay updated on global economic events and market sentiment that can impact the AUD’s performance.
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