AUDUSD: Dollar, down under

AUDUSD: Dollar, down under

Macro FX

Saxo Group

Summary:  Koalas, kangaroos and crocodiles. We've clearly landed in Australia, or as it's affectionately known, the land down under. With its wealth of natural resources, its no surprise that Australia's official currency, the Australian dollar, is one of the world's major currencies. As the fifth-most traded currency worldwide, the Australian dollar accounts for 6.8% of daily trades.


AUDUSD is the abbreviation of the Australian dollar and US Dollar currency pair. You might also hear it called by its nickname, the “Aussie”.  The value of this pair is always quoted as 1 Australian dollar (the base currency) per X US Dollars (the quote currency). So, if you see AUDUSD quoted at 0.7235, it will take .07235 US Dollars to buy 1 Australian dollar. That means 100 AUD would cost you 72.35 USD.

AUDUSD is driven by factors affecting the value of the Australian dollar and the US Dollar in relation to each other. Economic indicators that signal the strength of the economy, or interest rate decisions from the Reserve Bank of Australia (RBA) and the Federal Reserve, can all move the currency pair higher or lower.

A commodity currency

Australia’s economy is closely tied to the commodities it exports, from coal, gas and iron ore to meat and wool. That means commodity prices play a big role in the value of the Australian dollar, marking it as a commodity currency like the Canadian dollar (CAD) and New Zealand dollar (NZD). As commodity prices rise or fall, they can have a real impact on the strength of the Aussie dollar.

Case in point – in 2015, the prices for iron ore and coal dropped as oil prices fell. As the world’s largest coal and iron ore exporter, Australia was hit hard by this commodity slump and its dollar fell more than 15% against the USD.

The China factor

The AUD is also impacted by China, Australia’s largest trading partner. China buys a significant amount of Australia’s raw materials, which makes the Australian economy highly dependent on China’s business climate. If China’s economy is growing, the value of the AUD typically rises – while a drop in Chinese demand could lead to lower prices and a weaker Australian dollar.

Trade AUDUSD your way

With Saxo, you can trade AUDUSD and other FX pairs with true flexibility. Buy and sell currency pairs with Spot FX, get a jump on future prices with FX options or hedge your exposure with FX swaps. You can also trade cryptocurrencies against USD and other major currencies with our Crypto FX pairs.

Please note that FX related instruments are traded with leverage and small price fluctuations can lead to larger losses if market volatility increases. FX markets are sensitive to political and macroeconomic events, which can drive prices higher or lower rapidly. Therefore, you should ensure that you understand the risks before trading.

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited holds a Type 1 Regulated Activity (Dealing in securities); Type 2 Regulated Activity (Dealing in Futures Contract) and Type 3 Regulated Activity (Leveraged foreign exchange trading) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.