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Editors’ Picks

EUR/USD battles 1.19 after cautious ECB minutes

EUR/USD has stabilized around 1.19 after the ECB meeting minutes pointed to some caution about expanding the bond-buying scheme. Earlier, the dollar weakened after the Fed signaled openness to more QE. The US holiday implies thin volume.

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GBP/USD falls below 1.3350 amid Brexit concerns

GBP/USD retreats from near 1.3400, undermined by Brexit woes and renewed dollar demand. Doubts arise about Chief EU Negotiator Barnier traveling to London.

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XAU/USD remains supported above $1800 level amid quiet holiday trade

Spot gold (XAU/USD) continues its gradual grind higher for a second day, the precious metal having bounced at support at the psychological $1800 mark on Tuesday, following a hefty sell-off at the start of the week that saw spot prices drop from the high $1800s. 

Gold news

US Thanksgiving Wrap: Consumers carry October, November starts to look dicey

A triple dose of US data on Wednesday before the Thanksgiving holiday confirmed the strength of the consumer recovery even as employment problems again loom from the rising numbers of Covid-19 closures across the country.

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Black Friday 2020 Discounts!

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AUD/USD, THE “AUSSIE”

The AUD/USD pair, the “Aussie”, tells the trader how many US dollars (the quote currency) are needed to purchase one Australian dollar (the base currency). The AUD is a commodity currency whose country's exports are largely comprised of raw materials (precious metals, oil, agriculture, etc.).

The interest rates set by the Reserve Bank of Australia (RBA) have been among the highest of industrialized countries and the relatively high liquidity of the AUD has made it an attractive tool for carry traders looking for a currency with the highest yields.


AUD/USD CORRELATIONS

Australia is a big exporter to China and its economy and currency reflect any change in the situation in that country. The Australian Dollar is known by its greater exposure to Asian economies. Also, the pair AUD/USD often rises and falls along with the price of gold. In the financial world, gold is viewed as a safe haven against inflation and it is one of the most traded commodities.


FORECAST FOR 2020

FXStreet’s contributors, surveyed at the end of December 2019, expected the AUD/USD Forecast to be at 0.7000 by the end of 2020.

Read the full AUD/USD Price Forecast 2020


ASSETS THAT INFLUENCE AUD/USD THE MOST

  • Currencies: NZD and JPY. This group also includes EUR/USD, GBP/USD, USD/JPY, USD/CHF, NZD/USD, USD/CAD, GBP/JPY and EUR/JPY
  • Commodities: Gold, Iron Ore and Natural Gas.
  • Bonds: GACGB10 (Australian Government Bonds Generic Yield 10 Year), GNZGB10 (New Zealand Government Bond 10 Year) and T-NOTE 10Y (10 year United States Treasury note).
  • Indices: S&P/ASX 200 (stocks of the Australian Securities Exchange), S&P/TSX Global Gold Index (producers of gold and related products at the Toronto Stock Exchange).

ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE AUD/USD

The organizations and people that affect the most the moves of the AUD/USD pair are:

  • Reserve Bank of Australia (RBA) that issues statements and decides on the interest rates of the country. Its president is Philip Lowe.
  • Australian Government and its Department of Finance that implement policies that affect the economy of the country.
  • The US Government and its President Donald Trump): events as administration statements, new laws and regulations or fiscal policy can increase or decrease the value of the US Dollar and the currencies traded against it, in this case the Australian Dollar.
  • Fed, the Federal Reserve of the United States whose president is Jerome Powell. The Fed controls the monetary policy, through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis.

In terms of economic data, as for most currencies, the AUD/USD traders have to keep an eye on:

  • GDP (Gross Domestic Product), the total market value of all final goods and services produced in a country. It is a gross measure of market activity because it indicates the pace at which a country's economy is growing or decreasing. Generally speaking, a high reading or a better than expected number is seen as positive for the AUD, while a low reading is negative.
  • Inflation measured by key indicators as the CPI (Consumer Price Index) and the PPI (Production Price Index), which reflect changes in purchasing trends.
  • Current Trade Balance, a balance between exports and imports of total goods and services. A positive value shows a trade surplus, while a negative value shows a trade deficit. If a steady demand in exchange for AUD exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the AUD.