The 1 AUD to USD market rate fluctuates everyday. For the most part, the United States Dollar is a stronger currency than the Australian Dollar. Currently, it is trading around 1 AUD = 0.7 USD. This rate impacts international corporations, business owners and most of all, currency traders. Taking a closer look at the AUD/USD combination, we will reveal some of the top factors that impact your forecasting models.
AIG Manufacturing Index
The Australian Industry Group publishes economic factors like the manufacturing index. The index lends insight to the manufacturing in the country. If manufacturing shows expansion, investors may take this as a positive sign for the Aussie. Of course, this metric can indicate a shift in the economy, impacting currency rates against the US.
Commodity Prices In Both Countries
The Australian and US commodity prices are popular forecasting metrics. Forex traders use them to evaluate financial strength, individual purchasing power and general economic signaling. Undoubtedly, commodity irregularities or changes can have a major impact on either the Aussie or US dollar. Considering this impact, currency investors take these prices into careful consideration.
RBA Monetary Policy Statement
Just like the Federal Reserve Bank in the United States, the Reserve Bank of Australia has tremendous influence on currency valuation. Base on their statements, the Australian to US dollar rate can change either way. To speculate, investors can make predictions based on the most recent statements. Of course, it would be helpful to put the statements into context with the other market rate factors.
Australia To US Trade Balance Comparison
Using the two nations’ trade balance, forex investors can forecast based on their positive or negative trends. For example, some traders may infer that a smaller deficit in Australia combined with a higher deficit in US might lead to an eventual increase in Aussie value. Of course, the countries’ trade balance shows economic trends that any foreign currency expert would consider carefully.
US Dollar Sell Off
As in any currency pair, if there is a sell off of either currency, the rate will increase or decrease. If there is a USD sell off, then the AUD value will likely strengthen in comparison. To traders, this event could indicate a bullish or bearish outlook for the currencies. Furthermore, some experience traders will attempt to predict sell offs using historical data and other factors mentioned above. Almost always, a major currency sell off will change the AUD to USD exchange rate.
Overall, investing in foreign currencies require immense speculation. Depending on currency prices, your investment can be depreciated very quickly. To ensure profits, investors must do immense research to forecast the currency rates against each other. Using these factors, market trends and historical data combined, investors make forecasts to trade either 1 AUD to USD or visa versa.
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