Currency Pair: AUD/USD

To effectively deal with the quotation of the AUD/USD currency pair, it is obviously necessary to follow both the events that influence the Australian economy and those that influence the US economy. As for Australia, keep the following points in mind:

• The Chinese economy, given the fact that Australia exports a large part of its production to China.
• The quotation of raw materials such as iron, gold, copper, palladium and platinum that are part of the most important resources of the country.
• The Purchasing Managers Index (PMI) which is divided into three major sectors, namely construction, services and production. An PMI index above 50 indicates the growth of the sector to which it refers, while a value below 50 indicates a recession of course.
• The country’s Gross Domestic Product (GDP) and employment data are also good indicators.
• Finally, the various currency publications issued by the Reserve Bank of Australia must also be followed. Generally, this central bank communicates reference values of this currency which are very widely used as a basis by investors.

As for the United States, the following points should be followed:

• The set of economic announcements coming from this country, given that it is the largest world economy.
• The data and press releases relating to employment, non-agricultural wage bill or to the IPC, which reports on inflation, are also important data. It should be noted that the US Federal Reserve (Fed) has a double mandate and it is she who is in charge of these publications.
• The index of production prices (IPP) and its evolution over time.
• The institute of supply management (ISM) and its various press releases.
• The GDP (Gross Domestic Product) of the country that is officially published every three months.
• Retail sales as well as durable goods orders.
• Finally, of course, all the Fed’s decisions, particularly regarding the US dollar interest rate, are of primary importance in the analysis.

By carefully studying the various press releases relating to Australia and the United States you will be able to more precisely determine the most probable trends of the AUD/USD pair but you must still know how to interpret them. Inflation or consumer price index data generally leads to rapid price changes immediately after publication and it is therefore interesting to use these releases to take a position on this currency pair. In fact, in general, the FED acts on the US dollar interest rate based on these publications. Similarly, market volatility is high even when the Reserve Bank of Australia intervenes on interest rates. The publications that follow the monthly meetings aimed at evaluating the economic health of the country are obviously also very important. The inflation rate must be kept at around 2% as for all the big economies and for this reason the CPI will have a direct influence on the quotation of the AUD/USD currency pair. Still with regard to the Australian economy, we know that retail sales are an excellent indicator of consumer spending and therefore of the country’s economic growth. To conclude, it is important to follow closely the meetings of the US Federal Open Market Committee (FOMC) which take place every six weeks and which allow for interesting economic projections. The same is obviously true of the press conferences that are organized following these meetings and which generally have a great influence on the value of the US dollar.