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How to Effectively Trade AUDUSD

AUDUSD stands for the Australian dollar and the United States Dollar. It is a currency pair that is utilized in the foreign stock exchange market. This pair makes it easy for traders or rather readers to comprehend the amount of one currency that is required to exchange with the other. Normally the United States dollar is perceived as the counter currency while the Australian dollar is the foundation currency.

Check sites such as Avatrade to understand why you need to start with the counter rate in which the Australian Dollar can be exchanged with the USD. The value of the two is predicted.

Source: Capital.com

Can AUDUSD be affected

Switching the AUDUSD is known as an Aussie. If you are familiar with the stock exchange market then you have heard traders say how they have exchanged the Aussie at a low price. AUD-USD trading is also affected by several factors from economic, geographical to political.

When we are talking about geographical this means environmental factors that are inevitable especially in the foreign exchange market. For political factors, it means issues such as instability can lower the value of a currency. For example in countries such as Somalia or South Sudan, the currency is quite low as compared to others because the import and the exports made are low due to the chaos which happens frequently, this bringing down the currency.

Australia is a large country lumping vast and popular coal and iron sources. Whether the products will be transported is dependent on the cost of the commodities. Back in the year 2015 when there was a setback on the commodities the two items’ cost decreased. This leads to the devitalization of the Australian Dollar with a 15% rate.

After such an incidence economic issues will follow in the country since without money the development will also be crippled. If you compare a country like Kenya and Australia you will find that the Kenyan Shilling is lower than the AUD because of the economic decisions made over the years and also political instability that was all over the country in 2007, which greatly affected the shilling.

However, developing countries are picking up certain tactics to enable the growth of their currency. For instance, producing more materials to export and having multilateral relationships with developed countries such as China.

China can be referred to as the mother of inventions. That is why it has a great economy. It is one of the Australian ‘financial friend’ when it comes to exports. They acquire more than 40% of Australian commodities which positively affects the AUDUSD trading value. The development of China will inevitably lead to the growth of Australia. Countries need to sit down and evaluate and ask themselves ‘What does China lack? What can our country produce on a large scale?’ This way you will have products to sell to developed countries. They can later acquire processed machines from China.

Source: Forex Academy

Reserve Bank of Australia

This is an Australian Bank whose members meet 11 times a year to discuss financial issues of the country. Meetings are held monthly on Tuesdays excluding January. The minutes of the meeting held are edited and printed bi-weekly. The Reserve bank records the patterns at which the Dollar undergoes. They decide the exchange rates of the AUDUSD. It comes to a point where the currency lowers shockingly affecting the day-to-day running of the country.

Price of the commodity

In case the global price of commodities changes rapidly then the Australian economy changes too. Later AUD-USD trading will be affected too. Back in the year 2011 after the debilitating of the gold and oil, the Dollar was also affected by this, the value decreased regardless of the increase of the exports made

US Bureau of Statistics

Based in the United States, it is mandated with the task of providing price rates of the dollar. This agency also contributes to giving job vacancies that are crucial in affecting cost fluctuations.

Source: FX Empire

The Bureau of Statistics

The Bureau of statistics is mandated with the task of providing economic and social data that helps boost or determine the financial decisions of the country. It is important as a trader to follow the financial records realized by the Bureau because they help a lot in determining the patterns of the dollar which could greatly affect your AUDUSD trading. You either get great earnings or incur losses based on the information given.

US Federal Reserves

This is an American agency that has the right to decide financial decisions that can either affect AUDUSD trading positively or negatively. It realizes the financial difference between the prices of commodities in the country and helps make decisions 8 times a year. Its main function is to provide equilibrium between the prices of commodities in the country. It also helps curb the volatility of the stock exchange today to avoid negative impacts on the country’s economy.

AUD/USD trading hours

Trading hours with AUDUSD are open 24/7 but there are times when traders avoid trading because this is the time the market fluctuates and can lead to a higher rate of risks for your placed stakes. The trading hours are mostly active from 19:00 to 04:30 GMT.

Source: Forex Market Today

How to trade the AUD/USD CFDs

The AUDUSD trading has grown over the past couple of years which has been a result of the growth of the Australian economy after the gloom of its commodities. This currency pair acts as a link between two glooming developed countries. A trader can choose a trade to exchange the two currencies using another type of trading for instance Forex or CFD. Here he gets to predict the cost difference of the pair.

In CFD there is a relationship between an investor and a broker where one of them decides to pay up the contrast in the worth of a security. This happens at the beginning and the closure of the business relationship. The trader can choose the arrangement to be a long-term or short position. In the long position, the predictions are that the prices will increase while in the short position the prices will decrease.