Australian currency is widely traded in the foreign currency market. This is because many countries use Australian dollars. Australia’s economics indicates that Australia is the biggest country among these countries; it contributes a lot to the value of Australian dollar in the world of forex trading. Here are some of the most important Australia’s indicators that should help in forex strategy for anyone who want to trade in Aussie dollar. This is according to finance news.
Although Australia does not have many industries, it has one of the largest trade deficits in the world. Typically, a trade deficit often weakens the value of that currency, especially on foreign trading platforms. However, countries such as the US have managed huge trade deficits without making their currencies weak. In the forex market, Australian interest rates are among the highest. This is how countries with huge deficits maintain the value of their currencies while trading.
Gross domestic product
When considering investing in a currency, overall growth of that country is very important. Over the years, the GDP of the country has almost doubled. Currently, the largest industries in Australia are the service, mineral and agriculture. These industries are important since they are the key indicators of Australian future condition. For instance, if the weather condition is not conducive obviously the service industry will be affected impacting on the forex value.
As compared to other counties, the unemployment rate in Australia is almost half that of other countries. Although this is not a direct factor when it comes to forex trading, it is the best catalyst for certain timeline events. As employment increases, spending will increase. Both of these can easily lead to inflation which usually causes many banks to increase their interest rates so as to combat inflation. This will in turn strengthen the value of the currency.
Reserve Bank of Australia
According to Australia’s economics, the Australian money and its monetary system are managed by Reserve Bank of Australia. Reserve bank of Australia is there to maintain the monetary system of a country and to control inflation. Its role is just similar to the roles played by large central banks in other countries. When the interest rates of any country rises, it is only a matter of time before the currency improves. This means that in the analysis of currencies you should pay attention to reports regarding Reserve Bank of Australia and finance news