The AUD/USD pair is known popularly as the 'Aussie' and it tends to show how many U.S dollar (quote pair) is needed to buy one Australia dollar (AUD) (base currency). This pair is the most traded pair in the world. It's known by most traders as the Aussie and it's similar to most others like the New Zealand(NZD) and Canadian dollar (CAD) in that they are commodity currencies meaning that they that the country's export is greatly made of raw materials (oils, gold, agriculture and metals). The AUD/USD pair has risen greatly to be among the most popularly traded pair as the interest rate made by the reserve bank of Australia (RBA) has been among the developed countries and the high liquidity (ease at which getting this currency) has made it the best spot for trading positions in the forex market and carrying out trades that brings forth high yields.
FACTORS THAT MADE THE AUD/USD PAIR POPULAR
There are many factors that have led to the popularity of the AUD/ USD pair. These factors can increase or decrease the value of the pair. They include any of the following;
Interest rate: The AUD/USD has greatly increased over the years with its improved interest rate per investment. That means for every one dollar traded for the base currency there's a far greater interest attached to it. These interests can be in very large forms and can make the trader an overnight success.
High volatility of the AUD/USD pair: The problems of getting this pair are relatively easy as to most other pair i.e. The EUR/USD pair. That's why this pair is among the most traded in the forex market.
LATEST FORECAST FOR THE AUD/USD FOR THE YEAR 2017
These forecasts are mere predictions of possible price movements in the market. These predictions are pushed out to the public (traders) to enable them take decisions of how to trade on each pair to get high yields. However, these forecasts are not 100% accurate and as such can possess some degree of error and as a matter of fact should be taken with caution. They include
The Aussie is in a potential downtrend and can get hard for it to have rebound next year.
AUD is possibly the most volatile currency out there to a large downside correction in 2017 due to both the domestic risk and its influence to China.
INSTITUTIONS THAT CAN INFLUENCE THE AUD/USD CURRENCY PAIR
There are many known organization’s out there that influences or affects how price movements of this pair takes shape. These organizations, people and economic data include the following;
The reserve bank of Australia: This is the central bank of Australia charged with the responsibility of issuing statements and monetary policies on behalf of the Australian government. They take decisions on the interest rate of the country.
The Australian government and the Ministry of finance: They are charged with the task of implementing the policies of the reserve bank.
FED: It's mnemonic for the federal reserve of the U.S it's headed by Janet yellen and it’s charged with taking monetary policies strategy adjustments and increasing interest rate of the dollar against other pairs.
U.S government: Through proper administration the president takes fiscal policy of the dollar to improve the rate of dollar in the market.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.