Guidelines for Major Economies: Australia

Australia, officially known as the Commonwealth of Australia, is located in the southern hemisphere, southeast of Asia.

Australia is the world's largest island and the only country in the world to occupy a whole continent.

stay1788Before Europeans settled in Australia in, indigenous peoples occupied most of the country.

since1788Years later, people from all over the world immigrated to Australia, making it one of the most culturally diverse countries in the world. Now, Australians come from200Different countries and regions.

Finally, and most importantly, Australia is renowned for producing outstanding, hardcore actors, including Gibson from Brave Hearts(Mel Gibson)Jackman in 'Wolverine'(Hugh Jackman)Ledger in "The Clown"(Health Ledger)。

Australia: Facts, Data, and Characteristics

Economic Overview

AndG7Compared to other countries, Australia's economy is relatively small. However, according to data released by the World Bank, on an individual basis, Australia's is even higher than the UK, Germany, and even the United States!

In the past15During the year, the average annual growth level of the Australian economy was3.6%Compared to the world benchmark2.5%Be tall. No wonder it's at the Legtan Institute2011Ranked third in the Prosperity Index!

The Australian economy is service-oriented, It exceeds70%Originating from sectors such as finance, education, tourism, etc.

Despite its strong export industry and rapid growth, Australia is notorious for its persistent current account deficit. This means that Australia has exhausted a large amount of resources from other economies to meet its own consumption needs.

Monetary and fiscal policies

The Federal Reserve of Australia is the supervisory authority for monetary policy in Australia. The purpose of the Federal Reserve of Australia is threefold:

1. Maintain exchange rate stability
2. Ensuring Growth
3. Maintain full employment

In order to achieve these goals, the Australian Federal Reserve believes that the country's inflation rate must be maintained at2%reach3%Between. By strictly controlling the level of inflation, the price of the country's currency can be maintained stable, thereby ensuring stable economic growth.

How does the Federal Reserve of Australia control inflation? Two methods: adjusting the cash exchange rate and open market operations.

The cash exchange rate is the interest rate charged by banks for providing overnight loans to other financial institutions.

Open market operations involve the Federal Reserve of Australia controlling the supply of funds by buying and selling government loans and other financial assets. except1In January, the Federal Reserve of Australia holds monthly meetings to discuss changes in monetary policy.

To make this easier to understand, let's give an example. If Australia's inflation rate rises faster than the Federal Reserve wants, in order to suppress high inflation, the Federal Reserve of Australia has decided to increase the cash exchange rate, thereby increasing borrowing costs.

Usually, this approach reduces borrowing and reduces the amount of funds in circulation. Basic supply and demand tell us that the less things there are, the higher the price.

Understanding the Australian dollar

Although Australians may confuse the seasons, they all wake up early and start trading. This is because the Australian market is the first to open every week. Like the people who live there, the Australian dollar, the local currency of Australia, is also known as an Australian( Aussie)。

I am called the commodity dollar for a reason

An important feature of the Australian dollar is its high correlation with gold prices. The reason for this is that Australia is the largest producer of gold. Therefore, whenever gold prices fluctuate, the Australian dollar will also fluctuate accordingly.

I am one of the important candidates for arbitrage trading.

Among the major currencies, the Australian dollar is known for its high interest rates. This makes it one of the favorites for arbitrage trading. Arbitrage trading is the practice of buying high-interest currencies with low interest rates.

I only have a few hours of waking up in a day

The changes in the Australian dollar mainly occurred during the Asian trading period, when relevant Australian data was released.

Bad weather is my biggest enemy!

Australia is dominated by a commodity economy, and poor weather conditions can limit its economic growth, leading investors to short sell the Australian dollar.

What is the impact of weather conditions on the Australian dollar?

stay2002During the Australian drought in, Australian dollars/The US dollar fell to0.4770——That's almost half of its current exchange rate.

Important Economic Data for Australia

Consumer Price Index: As the primary goal of the Federal Reserve of Australia is to control inflation, the Consumer Price Index, which measures changes in prices of goods and services, is closely monitored by the Federal Reserve of Australia.

Trade Balance: Australia's trading sector is very active, so currency traders and bank officials are very concerned about the changes in the country's import and export levels.

Gross Domestic Product: This indicator measures the economic situation of Australia. A positive reading represents economic growth, while a negative reading represents economic contraction.

Unemployment rate: The unemployment rate tracks how many people in the Australian workforce are unemployed. The number of unemployed people is closely related to the performance of economic activity. A person without a job means they have less money to spend.

What factors affect the trend of the Australian dollar

Economic and interest rate prospects

The Australian dollar is greatly influenced by macroeconomic factors such as monetary policy, interest rates, and domestic economic data.

When trading in the Australian dollar, special attention should be paid to the prospects of interest rate fluctuations. The remarks made by RBA officials regarding interest rates will have a significant impact on the Australian dollar.

China's Economic Situation

Near in the past10During the year, China had great luck and experienced significant growth data. In order to produce products, China has imported a large amount of raw materials from Australia, such as coal, iron ore, etc.

To purchase raw materials from Australia, China must first convert its currency into Australian dollars. This means that the increase in demand for Chinese goods will lower and raise the price of the Australian dollar.

Similarly, a decrease in demand for Chinese goods will lead to a decline in the Australian dollar.

New Zealand data

To a lesser extent, New Zealand economic data will also affect the price behavior of the Australian dollar. Note that the economy of New Zealand is very similar to that of Australia, which makes their currency positively correlated.

In fact, the relationship between the two countries is sometimes referred to as "pan Tasman", which indicates the degree of closeness of the relationship between the two countries by implying the Tasman Sea between them.

Therefore, it is important to pay attention to the important economic data of New Zealand, as it will affect the trend of the Australian dollar.

AUD/USD trading

AUD/The trading volume of the US dollar is measured in Australian dollars. A standard hand is10Ten thousand Australian dollars, the mini hand is1Ten thousand Australian dollars.

Each point is priced in US dollars and Australian dollars/In the exchange rate expressed in US dollars, the fourth decimal place is one point.

Gains and losses are priced in US dollars.1In the case of standard hands, the value of each change is10USD; For a mini hand, the value of every change is1USD.

The calculation of margin trading is based on US dollars. For example, if the Australian dollar/The current exchange rate for the US dollar is0.9000The leverage ratio is100:1The minimum margin required for trading a standard hand should be900USD. However, with the Australian dollar/The rise in the US dollar exchange rate will increase the demand for US dollar deposits. On the contrary, the required amount of USD margin will decrease.

AUD/US dollar trading techniques

Because the Australian dollar is one of the best candidates for arbitrage trading, which involves buying high interest rate currencies and selling low interest rate currencies/The cross currency impact of the US dollar is significant.

How do you make use of this?

If you find the Australian dollar/The yen has broken through an important level of technical support, which means you should short sell the Australian dollar/It's in US dollars.

Conduct AUD/Another consideration for US dollar trading is the economic data of New Zealand. As Australia and New Zealand are adjacent and have related trade relations, positive New Zealand economic data will help drive up the price of the Australian dollar.

This means that the unexpected New Zealand economic report can be seen as a signal to buy the Australian dollar. On the contrary, the poor performance of New Zealand's economic data means that the Australian dollar should be sold.

Finally, take some time to look at the changes in commodity prices, especially gold prices. In most cases, changes in gold prices will guide changes in the Australian dollar price.