The Australian Stock currency exchange rate can simply be referred to as the total amount of money in AUD which needs to be given up in order to obtain its equivalent value in another currency. These rates are published on a daily basis and can be accessed from stock exchange sites or brokers. These rates come in pairs i.e. a combination of the AUD and another currency of interest for instance AUD/USD. A good Knowledge of the Australian stock currency exchange rate is a basic requirement for trading in the Australian stock exchange market. At the time of writing this, there are over 50 currency pairs in the stock exchange market and research has shown that of all the AUD currency pairs, USD/AUD is the most traded.
FACTORS THAT CONTROL THE AUSTRALIAN STOCK CURRENCY EXCHANGE RATE
1. THE AUSTRALIAN AND US ECONOMY
The major determinant of exchange rate is the local economy and the US economy. Apart from the economy of the location or region, the stock exchange currency rate is also controlled by the US economy since the USD is the most traded currency in the world. The stock exchange currency rates are controlled by the currency pair. An increase in the friendliness of the Australian market to international trade will go a long way in determining the currency exchange rate.
2. FORCES OF DEMAND AND SUPPLY
Increases in the need for international trade in a region will to a large extent affect the stock exchange currency rate and vice versa. The stock exchange currency rates are affected by the increase or decrease in the international trade in the country which will increase the need for exchanging currencies.
3. COMMISSIONS AND LEVERAGES
Commissions charged on trading in the currency and the leverages also goes a long way in determining the forex exchange rates.
ADVANTAGES OF THE STOCK EXCHANGE CURRENCY RATES TO TRADERS
1. SOURCE OF INFORMATION
The major aim behind the daily stock exchange rates is to serve as a source of information on the nature and behavior of the currency pair in the market. This information also gives the trader a heads up on what is happening in the Australian stock exchange market. With the daily stock exchange rate values, the trader can be able know how well or bad the currency is faring in the market.
2. INVESTMENT PLANS
Trading in the stock exchange market requires the trader to take calculated risks based on plans which have been arranged over time. The Australian stock currency exchange rate gives the trader the ability to sit and plan on the best way and time to invest in the market. A good plan will reveal to the trader the best time to either invest or leave the market. By studying the Australian stock exchange rate, the trader can clearly decipher the best time to enter or leave the market.
3. PREDICTION OF THE MARKET OUTCOME
The stock exchange currency rates are displayed in tables and charts which allows the trader to be able to easily study them and draw valid conclusions concerning the market behavior at the time of study. These exchange rates can be used to accurately predict the outcome of the stock exchange market in the nearest future.
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.