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AUD/USD: Trading the Aussie Pair

online binary currency trading

Though currency market is highly volatile, traders can take advantage of exchange rate fluctuations for speculative purposes. It is heavily influenced by economic movements and world affairs. It is best traded between economic news events. There are eight most traded monetary units in the world, US dollar (USD), Canadian dollar (CAD), Euro (EUR), British pound (GBP), Swiss franc (CHF), New Zealand dollar (NZD), Australian dollar (AUD) and Japanese yen (JPY).

 
With the number of world monetary units, there are far too many possible currency pairs for anyone to keep track of mentally. If you are going to invest a pair, then you want to know what is going on in the 2 countries. Every broker has their own list of pairs that is made available in their platform. The most commonly traded pair in the market is EUR/USD, USD/JPY, GBP/USD, EUR/GBP, USD/CHF, USD/CAD, EUR/JPY and AUD/USD. And the rest are less known pairs but still are worth to take a look at because of its uniqueness.

AUD-USD_24
From these pairs to choose from, which pair should you invest? With USD being paired with every monetary unit, it is the most dominant today. All units are measured using USD as the standard because almost all the transactions globally are employing by US dollar. Another unit which is popular with traders is AUD because of high interest rate in Australia.

Being one of the largest countries in the Pan-Pacific region, its global influence is consistently growing and that is a good indicator that this currency has a high potential in the market.  Economy in Aussie country is stuck between strong commodities and practically everything else; it has become a significant market in global foreign exchange on a total volume basis. Australian dollar is currently is doing well and not in par against the US dollar.

With both countries holds a significant power in the world today, their currencies fluctuates in a traditional regular basis so this means that this pairs easy to predict. Traders should understand the strength of the currencies and their related economies, for you to react immediately on the movement of the market with this pair. Australian Dollar-US Dollar pairing offers less liquidity and volatile movement is often seen. This pair conducts 5 and 6 percent of the global daily trading volume. This pair is also known as the “Aussie”.

Factors that could affect the Aussie

As previously mentioned this pair is strongly linked to commodities as AUD is often correlated to value of gold. Investors who are interested in this pair should monitor market news which is related to commodities.  Australia is a large producer of gold and therefore the price of AUD/USD is typically influenced by the price of gold.

Thus when the gold price goes up, this asset is expected to go up, too. In view of this, if you simply follow the gold price as well as the economy of USA then you can surely predict the movement of it. It is categorized under minor currency pairs which are commonly designated as commodity currencies. Other commodity pairs along with this are USD/CAD and NZD/USD which offers a very competitive spread rates as well.

ioption_aud_usd2

When to place a call or put option?

Trading “Aussie” is favored as a way to diminish portfolio risk as it provides the ability to profit in rising and falling markets. When you trade this pair on binary options, the pair compares the value of the Australian dollar to the US dollar. The fluctuation of prices will depend on actual changes in the country and trader approaches towards its economic strength.

When tradeoff binary options on this particular pair, traders should determine how Australian dollar will trade relative to the US dollar. If a trader believes that the AUD will rise in relation to the USD they should place a call option.

The alternative currency pair

We are all aware that EUR/USD pair is the most traded pair in the market worldwide but AUD/USD is a good alternative whenever you have no idea where EUR/USD will go. However, moves on this pair are smaller than on EUR/USD but it definitely worth a try with this pair to make a profit from your investment especially when you what you’re doing.

Now that you know the advantages of trading with AUD/USD pair, see how it compares with other pairs available in the market by starting to open account here.

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