AUDUSD stands for the Australian Dollar Index and the Australian Dollar Currency Unit. Also referred to as the AUS, the AUD-USD exchange rate relates to the US dollar. This currency is traded at a high volume, usually in the interbank market, which is one of the fastest and most liquid markets in the world. This makes it a very popular choice for many investors. It also offers low spreads and little or no spreads, making it a favorite for traders who prefer to buy and sell the same currency in pairs. This is unlike other currencies, which are traded in smaller volumes and offer high spreads.
The main function of the AUDUSD currency pair is to track the movements of commodities. This has been made possible because of the trading volume of the market. The commodity prices move quickly in the interbank market, so they can be easily monitored. Traders can set stop loss levels and take advantage of other profit and risk management features. Because it is traded so frequently, many forex traders have made a lot of money with this market, and there are also many who lost money with the trading.
Unlike other major currencies, the Australian Dollar is not an interest bearing currency. Therefore, the AUDUSD moves in relation to other major currencies. This gives it the unique ability to track the movements of commodity prices and create price stability within the forex market. Because it is traded so frequently, major trading banks make millions each day by influencing the exchange rates. These institutions also allow investors to trade in the forex market, making profits for them as well.
In the 1970’s, the United States began using the American Dollar as its currency. Since then, the AUDUSD has closely followed the US Dollar. The Australian Dollar strengthens when the US Dollar weakens, which makes the AUDUSD the most easily affected foreign currency. The currency pair is also very sensitive to various political events that may affect the economy of different countries. For example, when Australia faces an economic crisis, the AUDUSD will weaken against the USD because of the impact of the crisis on the banking system. If the economic situation is positive, the AUDUSD will usually strengthen, although the recent economic recession caused the economy of the country to experience large changes in its GDP and interest rates.
Trading of the AUDUSD often occurs through major world banks such as those of the US, Japan, New Zealand, and the Eurozone. When trading occurs through these banks, one of the most important trading partners for any investor is the United States. Most of the major economic indicators in the US usually reflect a stronger US Dollar. It has also recently begun to become more open to trading of the AUDUSD with other major currencies. Some analysts believe that the AUDUSD is moving towards recognition as a major world currency.
The main trading pairs of the AUDUSD are the US Dollar/ AUDUSD, US Dollar/ NZD, Canadian Dollar/ AUDUSD, European Dollar/ AUDUSD, and British Pound/ US Dollar. These are the major currency pairs in the world where trading of the AUDUSD can take place. Other minor trading partners for the AUDUSD include the Euro, Swiss Franc, New Zealand Dollar, Japanese Yen, Singapore Dollar, Australian Dollar, and Euro (FOLK) among many others. Because of the increasing number of trading partners, the trading volume of the currency pairs are expected to continue growing rapidly in the years to come.
The major growth of the trading of the AUDUSD can be attributed in part to the growth of global trade within the major international economies such as the US, Canada, and Japan. Several Asian countries have also gained rapid popularity as trading partners of the US Dollar. Australia, with its free trade agreement with the US, has also gained some traction as a trading partner of the US Dollar. In addition, political stability in several Middle Eastern countries including Dubai, Macau, and Saudi Arabia have promoted trading of the AUDUSD in recent years. The low volatility of the market due to these factors also contribute to the increasing popularity of trading of the AUDUSD.
Another important factor behind the popularity of trading of the AUDUSD is the relative strength of the American Dollar against the major currencies in the world. The US Dollar is stronger than the major currencies because it is stronger than the economies of many other nations. In contrast, the AUDUSD is much weaker than most of the major currencies. This weakness in the AUDUSD serves as an important trading opportunity for investors who want to speculate the Forex markets. Because of the popularity of trading the AUDUSD, there are various types of Forex brokers available in the industry.