AUD USD

AUD USD is a popular currency pair among in forex market and among forex traders. This currency pair is popular among currency traders to a great extent primarily because of lack of intervention by Australian Government in the FX market. Besides this the fact that the Australian economy and government are relatively stable, plus the AUD does seem to offer diversification benefits in a portfolios that contains the major world currencies is another important reason for it being traded so widely and enjoying the popularity that it does. The reasons for this could range from AUD USD’s exposure to Asian economies, the commodities cycle and so on.

The Australian Dollar or AUD is sometimes also referred by names like “Pacific Peso” the “Aussie”. It is represented by AUD or A$. It is the official, government certified, internally recognized currency of the Commonwealth of Australia. This includes the Australian Antarctic Territory, Christmas Island, Cocos Islands, Heard Island and Mc Donald Islands along with the independent Pacific island states of Kiribati, Nauru and Tuvalu. AUD USD has the highest exchanges and then with other currencies like JPY and CAD.

The Australian Dollar is the sixth most traded currency in the foreign exchange markets and AUD USD is the most popular currency pair in currency market. The five currencies ahead of AUD are the United States dollar (USD), Japanese yen (JPY), Euro (EUR), British Pound Sterling (GBP) and Canadian dollar (CAD). This counts for approximately 5% of foreign exchange transactions done across the globe. This pair is one of the pairs that makes strong trends.

Each Australian Dollar (AUD) can be broken down into 100 cents. As per information generated till recently the smallest coin circulating is equal to five cents; one and two cent coins were discontinued in the early 90s and were withdrawn from circulation. Cash transactions done in AUD are rounded up or down to the closest multiple of five cents. In currency market, AUD USD can be traded from minimum 0.01 or 1000 unit.

For many years now Australia’s balance of trade has been depending upon commodity exports like minerals and agricultural products. This influences the relative value of the dollar and so the value of 1 AUD to USD significantly during the business cycle. It rallies during global booms as Australia exports raw materials, and drops when mineral prices slump or when their domestic spending overshadows the export earnings outlook. AUD USD is one of the best pairs for trading on the small time frames like 5min.

AUD USD movement relative to the global economy is normally found to be moving in the opposite direction as compared to the other major currencies, which are more popular during slumps as this is the time when the traders move value from falling stocks into cash. This results in high volatility and unorthodox movement in exchange rates. And this has contributed to the AUD USD status as one of the most popularly traded currency pairs in the world to quite an extent.