AUDUSD Currency Pair is a widely traded currency pair in the Forex market, having an average daily volume of around one billion dollars. The AUDUSD ticker symbol is the standard ticker name for the Australian Dollar and the US dollar exchange rate. Also called the ‘AUS’, this currency pair has an established reputation of being an efficient free market player due to its stable nature and high liquidity.
This currency pair has been developed by the Central Bank of Australia (CBA). This country’s central bank manages the AUDUSD and AUDCHD rates on a regular basis using a process called ‘fixing of the future currency rates’. This process ensures that the exchange rate remains fixed, in line with changes in the value of the two countries.
This currency pair has been in place since early 1990s and is usually seen in combination with the US dollar. It is also occasionally used alongside the Euro, British pound and Canadian dollar.
In the context of the European Economic Crisis, the AUDUSD exchange rate has fallen sharply against major currencies including the US dollar, as there are fears that the Euro might collapse in value, and that the US Federal Reserve could tighten up interest rates. However, despite these factors, the AUDUSD exchange rate remains relatively strong.
The AUDUSD is based on the conversion rate between the U.S. and Australian dollars, but it also incorporates certain factors such as AUDCHD price deflators, which allow traders to estimate their AUDCHD cost of goods sold and their AUDUSD cost of goods purchased, depending on factors such as the retail price index and AUDCHD margin requirements. This allows traders to better manage their AUDCHD and AUDUSD positions and minimise losses.
The AUDCHD price deflators allow traders to more accurately determine the cost of imported goods and services. By taking into account AUDCHD margin requirements, traders can also adjust their price range and profits through a systematic process.
The AUDUSD has an international reputation for being an efficient and secure way of trading in the forex market. The AUDUSD has an excellent liquidity profile – unlike some of the larger and more volatile European exchange rates, AUDUSD trades in a steady and predictable way and does not exhibit significant price fluctuations when measured against the other major currencies.
Due to the size and nature of its size, the AUDUSD is considered as one of the most liquid and transparent currency pair in the world. Its open nature allows it to be traded effectively across all financial markets, both domestically and internationally. This is because the AUDUSD rate is based on the same market makers that operate in the US market. Because of its liquidity, this currency pair allows investors to trade from any part of the world and in any currency – ensuring maximum exposure to this great global market.
AUDUSD is also considered to be one of the most stable currencies in the world, and this is reflected in the fact that it can be compared against the US dollar, the British pound, the Canadian dollar and the Euro. While the AUDUSD rate may fluctuate on occasion, it is consistently higher than the other two. This stability is one of the main reasons why this currency pair remains one of the best tools in an investor’s toolkit.
The AUDUSD is also one of the safest pairs in the forex market. Because it is based on market makers that are located throughout the world, it is one of the few currencies that remain fixed in terms of its exchange rate, meaning that it is unlikely to change against another pair.
This means that trading in the AUDUSD is an effective way of hedging against foreign exchange risks, because in order to take a risk out of a trade, traders have to purchase more AUDUSD than they risk losing. In addition, they are able to protect themselves from possible future changes in the exchange rate by taking their profits off the table and investing in a safer currency. Trading AUDUSD also ensures that their position is in one of the safest markets around. As a result, they have lower spreads, which means they pay less in commissions and allow them to enjoy a greater degree of control over their trading.
Although the AUDUSD trade is relatively safe, there are still some risks that are associated with it. These risks include higher than normal spreads that may cause the trade to have a greater impact on the overall performance of the market.