Australian Dollar General Info
The three letter currency code for the Australian Dollar is AUD and the symbol is $. It is the domestic currency in Australia, Christmas Island, Cocos Keeling Islands, Heard And McDonald Islands, Kiribati, Nauru, Norfolk Island and Tuvalu.
The Australian dollar is the fifth most traded currency in the world, it trades in the world foreign exchange markets behind the US dollar, the euro, the yen and the pound sterling. The Australian dollar is popular with currency traders, because of the high interest rates in Australia, the freedom of the foreign exchange market from government intervention, the stability of Australia's economy and political system, and the view that the Australian dollar offers diversification benefits in a portfolio containing the major world currencies, especially because of its greater exposure to Asian economies and the commodities cycle. The currency is commonly referred to by foreign-exchange traders as the Aussie dollar.
AUD - Market View
Fortunately for holders of Australian dollars, the currency was resurgent in June and July having tumbled between March and May on the back of patchy economic data and a meltdown in the price of Australia’s largest export, iron ore.
In June, the Aussie was the joint-second best performing major and by July 20th it had risen to a two-year high against the US dollar of $0.7987, to an eleven-week high against the New Zealand dollar of N$1.0845, and against the yen, Singapore dollar and euro, had risen to nineteen-month, five-month and three-month highs respectively of ¥89.32, S$1.0929 and €0.6936.
The Australian dollar benefitted in June and July from a stabilization in the price of iron ore, which climbed back above $65; because of positive risk sentiment, evident from record highs in stock prices; and because of speculation over interest rate hikes.
The Aussie soared following the release of minutes from the RBA’s July meeting in which it emerged that the bank had discussed a neutral interest rate of 3.5% should the Australian economy continue its recovery. The current rate remains at just 1.5%.
Speculation over the commencement of monetary policy normalization in Australia was quelled however, when several days after the minutes were released, the RBA’s deputy governor, Guy Debelle, told business leaders in Adelaide that “no significance should be read into the fact that the neutral rate was discussed.” As if to say “nothing to see here,” Debelle added that “[during] most RBA meetings, the board allocates some time to discussing a policy-relevant issue in more detail, and on this occasion it was the neutral rate.”
AUD fell by 1-2% against most currencies following Debelle’s comments but nonetheless remains at high levels by recent standards, particularly against the US dollar, yen and Singapore dollar.
Long-term forecasts for iron ore remain gloomy and bank forecasts for AUD/USD for year-end range from $0.7 to $0.75.
AUD/USD - 09:00 AEST
1 Day 1 Week: Australian Dollar finished the last session of the week up against the United States Dollar with the AUD/USD at 0.7916, a rise of 0.34% and also up for the last 7 days with a rise of 2.39%.
3 Month Trend: AUD/USD is trading higher in the 3-month range [Hi:0.7972, Lo:0.7358] and for the quarter is up 4.5%.