What is the “Aussie”?

    AUD/USD is a currency pair consisting of the Australian dollar and the US dollar. In trading jargon, this pair is known as the Aussie.

    It shows how many US dollars (the quote currency) it costs to purchase one Australian dollar (the base currency).

    Trading AUD/USD “Aussie”

    The Aussie is one of the seven major currency pairs that contain the US dollar and are the most traded pairs on the forex market. It is considered to be very liquid because the Australian dollar is the fifth most traded currency on the forex markets and Australia’s forex market is globally the seventh largest. Furthermore, Australia is a major exporter of commodities with a stable government, adding to its value as a tradable currency.

    As currency pairs are affected by external factors that influence an individual currency value, the AUD/USD will fluctuate according to the difference in interest rates set by the Reserve Bank of Australia and the Federal Reserve (Fed). For example, any intervention by the Reserve Bank of Australia in the markets aimed at strengthening the AUD would be likely to see a rise in the value of the AUD/USD. Conversely, if the Fed takes action to strengthen the dollar by intervening in the markets the value of the AUD/USD would be likely to fall.

    The Australian dollar enjoys a positive correlation to the Canadian dollar (CAD) as both countries are commodity-rich exporters with similar economic structures. For this reason, the Aussie is negatively correlated to USD/CADUSD/CHF and USD/JPY because their base currency is the US dollar, versus the US dollar being the quote currency in the Aussie.

    To learn more about the economic impact on currency pairs, visit: