- Aud / USD goes to almost 0.6500, the highest level seen in five months.
- The victory of the Australian Labor Party has strengthened the Australian dollar.
- Investors expect the Fed to maintain stable interest rates on Wednesday.
The Aud / USD pair displays Monday five months of five months near the psychological level of 0.6500. The Australian pair is strengthened while the Australian dollar (AUD) surpasses, the continent's labor party to the sole country obtaining a second consecutive term of three years after winning legislative elections.
Australian dollar price today
The table below shows the percentage of variation in the Australian dollar (AUD) compared to the main currencies listed today. The Australian dollar was the strongest against the Canadian dollar.
| USD | Eur | GBP | Jpy | Goujat | Aud | Nzd | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.06% | -0.40% | -0.56% | -0.01% | -0.45% | -0.59% | -0.29% | |
| Eur | 0.06% | -0.06% | -0.24% | 0.32% | -0.12% | -0.26% | 0.04% | |
| GBP | 0.40% | 0.06% | -0.40% | 0.38% | -0.06% | -0.20% | 0.10% | |
| Jpy | 0.56% | 0.24% | 0.40% | 0.55% | 0.12% | 0.05% | 0.37% | |
| Goujat | 0.00% | -0.32% | -0.38% | -0.55% | -0.74% | -0.59% | -0.29% | |
| Aud | 0.45% | 0.12% | 0.06% | -0.12% | 0.74% | -0.15% | 0.16% | |
| Nzd | 0.59% | 0.26% | 0.20% | -0.05% | 0.59% | 0.15% | 0.30% | |
| CHF | 0.29% | -0.04% | -0.10% | -0.37% | 0.29% | -0.16% | -0.30% |
The thermal map shows the percentage of variations in the main currencies against each other. The basic currency is chosen in the left column, while the quotes motto is chosen in the upper row. For example, if you choose the Australian dollar of the left column and you move along the horizontal line to the US dollar, the percentage of variation displayed in the box will represent Aud (base) / USD (quote).
The victory of the leader of the Australian Labor Labor Anthony Albanese indicated the continuation of current economic policies, a scenario which is theoretically favorable to economic prospects.
However, investors are still uncertain of Australia's economic prospects in the face of the trade war between the United States (United States) and China. Since Australia is China's main trading partner, arousing concerns about Beijing’s economy weighs on the Australian dollar.
Meanwhile, a small start by the US dollar (USD) at the start of the week also supported Australian pair. The US dollar index (DXY), which follows the value of the greenback compared to six main currencies, collapses at almost 99.60.
The USD index is negotiated in addition to the interest rate decision of the Federal Reserve (Fed), which will be announced on Wednesday. Traders have a price entirely in that the Fed will maintain the interest rates unchanged in a range of 4.25% to 4.50%. The reasoning behind the Fed leaving its main stable borrowing rates is the high expectations of consumers' inflation and pay data (PNF) better than expected for break -ins (PNF) for April.
Australian dollar faq
One of the most important factors for the Australian dollar (AUD) is the level of interest rate set by the Bank of Australia (RBA) reserve. Because Australia is a country rich in resources, another key engine is the price of its greatest export, iron ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and its commercial balance. The feeling of the market – that investors have more risky assets (risk) or are looking for safety havens (risk) – is also a factor, with a positive risk for AUD.
The reserve bank of Australia (RBA) influences the Australian dollar (AUD) by fixing the level of interest rate that Australian banks can lend each other. This influences the level of interest rate in the economy as a whole. The main objective of the RBA is to maintain a stable inflation rate of 2 to 3% by adjusting increased or down interest rates. Relatively high interest rates compared to other large central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative softening and tightening to influence credit conditions, with the old Aud-Negative and the second positive audience.
China is the largest trading partner in Australia, the health of the Chinese economy therefore has a major influence on the value of the Australian dollar (AUD). When the Chinese economy is doing well, it buys more raw materials, Australian goods and services, to lift demand for the AUD and to raise its value. The reverse is the case when the Chinese economy does not develop as quickly as expected. Positive or negative surprises in Chinese growth data therefore often have a direct impact on the Australian dollar and its pairs.
The iron ore is the largest export in Australia, representing $ 118 billion per year according to 2021 data, China as the main destination. The price of the iron ore can therefore be an engine of the Australian dollar. Generally, if the price of the iron ore increases, the AUD also increases, as the overall demand for the currency increases. The opposite is the case if the price of the iron ore falls. Higher prices of iron ore also tend to lead to a greater probability of a positive commercial balance for Australia, which is also positive of the AUD.
The commercial balance, which is the difference between what a country earns its exports in relation to what it pays for its imports, is another factor that can influence the value of the Australian dollar. If Australia produces highly sought -after exports, its currency will gain only from the excess demand created from foreign buyers seeking to buy its exports in relation to what it spends to buy imports. Consequently, a positive net trade balance strengthens the AUD, with the opposite effect if the trade balance is negative.
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