The dollars of Australia and the US (AUD/USD pair) is an excellent choice for trading. It is also called the Aussie. The situation of market costs is chiefly connected with the product markets and the economy of China.
Here is the question: why is it the Chinese economy that matters so much? The explanation is simple: its economy holds second place worldwide, and 1/3 of the export by Australia goes to China. That’s why the Chinese financial policy, changes in its economy will provoke the fluctuations of AUD/USD.
Moreover, concerning the market of products, Australia produces iron, coal, gold, and other akin products. Therefore, any influence on products provokes changes in the economy of Australia.
If traders decide to deal with AUD/USD, they should take into account three main aspects.
Aussie is thought to be a very variable currency pair. Such characteristic is given to the pair because the two currencies are influenced by plenty of factors that can be expressed in many ways. This allows distinguishing the period when traders decide to trade.
Traders ought to pay attention to Chinese data, like the business activity index, financial policy, GDP, and rising prices.
They also have to keep an eye on the decisions of the Central Banks of the US and Australia. The Reserve Bank of Australia or RBA has meetings every month while the Federal Reserve in the US does it once in half a year.
Moreover, traders shouldn’t forget about the PMI in three parts for every sphere: services, production, and construction. If the PMI exceeds the figure of fifty, it can tell about the rise in the sector, and if the number drops lower than fifty, we can diagnose a decline in the area.
It’s also significant to keep in mind the GDP and info on employment.
Each time a pair has something to deal with the US, traders should note that the US owns the most robust economy in the world. That’s why everything happens there speaking of the economy (including the news) plays a significant role.
The US Central Bank, also called a Federal Reserve, is characterized as having a dual mandate. That’s why info about the jobs, that is, CPI (Inflation) and Non-Farm Payrolls mean a lot to traders.
Nevertheless, there are other significant economic news releases (same ones) that influence the States’ economy drastically. They include Institute for Supply Management (ISM) (connected with the production and not connected with it), PPI or price index, GDP (published once a quarter), ADP, retails sales and order for lasting goods.
Now when we know that the economic releases from both countries that may influence AUD/USD, we can consider what traders ought to expect from all that.
They have to keep in mind that the market is moving fast, in particular, when the rising prices and CPI are published. That happens because the economic release pushes the Central Bank to behave fast and alternate interest rates.
Besides, traders have to be ready for a variable market when the RBA decides on the interest rate, as well as within the meetings, which are held every month to study the situation in the economy of Australia.
The RBA possesses the mandate to hold the inflation of Australia at the figure of 2% (it’s better to keep it at the lower level) because it’s one of the largest economies worldwide. That’s why traders have to keep an eye on the CPI, rising prices as long as it comes from an extremely balanced movement because the RBA should do its best to fulfill this mandate.