Trading on the AUDUSD currency pair requires knowledge of technical analysis and underlying economic forces. It also requires consideration of relevant currency correlations. For instance, when one currency pair gains or loses value, other currency pairs will tend to follow suit. This correlation can be negative or positive and may change over time. This means that if a certain currency pair gains in value, it will most likely trend higher in the future.

In the US, monetary policy is set by the Federal Reserve, which has a dual mandate to keep both inflation and structural unemployment low. It intervenes in the market when needed to help keep prices stable and to support the economy. The Federal Reserve’s decisions tend to have a stronger impact on the AUD than the USD, which is one of the main reasons for the currency pair’s volatility. Besides these economic factors, traders should also keep an eye on the Federal Open Market Committee’s press conferences and forecasts.

The Australian dollar’s value fluctuates with global equity markets. Generally, the AUD appreciates when global stock markets increase, and depreciates when global stock markets decline. The Australian dollar’s strength in global markets is measured by the ‘Big Mac Index’. Using this index, investors can see whether the AUD is going to move up or down in the near future.

The AUD/USD currency pair is also affected by US-Australia trade relations. The two countries have a close economic relationship, and have become trusted trading partners and investment partners. Since the ratification of the Australia-United States Free Trade Agreement in 2005, direct foreign investment between the two countries has increased by over $1 billion. Moreover, US exports to Australia have increased by twofold since the agreement was ratified, and most commodities are denominated in US dollars.

Rising commodity prices can also affect AUD/USD. The Australian economy is heavily dependent on commodities, and if the prices of these commodities rise, the AUD/USD will be stronger. Another factor that influences the AUD/USD is the interest rate differential between Australia and the U.S. This makes the AUD/USD more attractive to investors.

As a trader, it’s important to learn about the AUD/USD currency pair’s fundamentals. A detailed understanding of the relationship between these currencies will help you make more accurate predictions. In addition, you’ll be able to predict the direction of the currency pair more accurately. For example, if China’s economy slows down, it could push down key commodity prices.

Currency exchange rates can make a huge impact on the AUDUSD currency pair. As the world’s largest economy, Australia’s economy is highly dependent on commodities, making it a popular trading currency. AUDUSD is a highly liquid currency, so you can make a profit by selling your Australian dollars in the US. This allows you to trade on the AUDUSD currency pair with minimal risk.

Interest rate differentials between the US and Australian central banks are a large part of AUDUSD currency trading. The differential between the two currencies indicates how much demand a particular country has for its goods and services. When demand for a currency increases, its value rises. Similarly, if the country has high inflation, its currency loses value. Other indicators of economic health include GDP, retail sales, and employment. Once you have a handle on these factors, you can make a decision about whether or not to trade on the AUDUSD currency pair.