By stats, the most popular Forex currency pair (or CP) is EUR USD. It occupies up to 32% of the market. The GBP USD pair is also in demand. It accounts for up to 16% of cash turnover. Nay, traders pay attention to the Canadian dollar and the Japanese yen.
Thus, some dealers have completely ignored the AUD USD pair during the last several years. Although, this CP is considered one of the seven major ones. Thus, it’s profitable to invest in it. However, that’s true only if traders use reputable brokers’ sites (e.g., fbs.com). So, let’s study the Australian and US dollar couple in more detail.
What Should Traders Know About AUD USD?
During 2000-2007, the Australian dollar had been appreciating slowly but surely against the USD. Thus, the AUD ratio to the US dollar was almost 1:1 by early 2008. But the same year, the global crisis hit the Australian economy hard. As a result, the national currency depreciated against the USD almost two times.
However, the Australian economy quickly recovered. So, in the summer of 2011, traders gave 1.1 USD for 1 AUD. And the Australian dollar had been dominating until 2013. Finally, in 2020, due to the pandemic, as well as natural disasters, the AUD dipped heavily. But experts anticipate this currency to strengthen again soon.
Benefits of the AUD USD CP
Experienced Forex traders and trustworthy financial specialists note the following advantages of the mentioned currency pair:
- Favorable geographic Australia location. The country’s remoteness from other continents plays into its hands. The state is almost unaffected by geopolitical conflicts, although Australia is involved in world trade. Moreover, global crises have little effect on the country’s economy.
- Exchange predictability. Compared to other “major” pairs, AUD USD has a small number of influencing factors.
- Presence of a large amount of information for analysis. A lot of information for analyzing the state of the US and Australian economies is in open sources. Most Forex brokers (e.g., FBS) have separate reviews on the specified CP in their analytical materials.
Additionally, the AUD USD pair excels in rather low volatility. That’s why this CP is the best suited for long-term investments.
Key Factors Affecting AUD USD Exchange Rate
Here, financial experts and skilled Forex dealers highlight the next parameters:
- Geopolitical situation that determines industrial and consumer demand for exported raw materials. This also indirectly involves the state of the trading partners’ economies (e.g., Japan and China for Australia).
- Macroeconomic indicators of Australia and the USA. This includes GDP, discount and inflation rates, the balance of payments, etc.
- Force majeure. For Australia, it can be weather or climatic changes that adversely affect the production of raw materials.
It’s also worth noting the influence of microeconomic indicators. For example, the success of individual leading US and Australian companies in export industries may have little effect.
When Is Best to Trade AUD USD Pair?
The optimal time for trading the specified CP on Forex is opening the American and London sessions. This is because the largest exchanging volumes, together with volatility, are observed during the mentioned periods. These are intervals 07.00 – 08.00 and 12.00 – 15.00 GMT.
Dealers should calculate the time based on their jurisdiction timezone. Moreover, the mentioned periods don’t consider the hours’ transfer in various seasons. This is an especially critical factor for traders who often travel worldwide.