In order to avoid financial risks, it is important to take into account the patterns of the market and its peculiarities, to make a fine calculation in predicting the behavior of individual currencies and to know the situation of the real economies of countries, because the price of the currency is supported by quite real events. The Australian dollar is underpinned by a successful economy and sharp GDP growth (the 13 place in the world). Australia is ranked 19th in the world in exports, in 2009 it became the currency of the top 5 most traded in the currency market.
Liquidity of the currency is supported by natural resources: oil, gold, fertile soil, diamond deposits, coal, nickel, ore. The geopolitical situation has made this country an influential participant in world maritime trade. State policy is aimed at stabilizing the currency and free development of business.
Independence Of Australian Dollar
The increase in the price of AUD is triggered by the lack of third-party influence on Australia’s financial market. If most liquid currencies are interdependent or dependent on the decision of a foreign government, then AUD is governed only by the Reserve Bank of Australia. At the same time, RBA very rarely carries out unauthorized interference in the financial market and leaves the currency in free development, the exception being only crisis situations.
For world trading AUD is a chance to invest and enrich in a short period of time. Stability and high currency price allow high interest rates to be charged on deposits in AUD.
Financial Risks To Investment In The Australian Dollar
The lack of control over the development of the currency has the opposite side, it leads to dependence on the pace of economic development. If the country’s trade activity goes down, the capitalization of the currency and its value will decline. When trading on Forex in Australian currency, the development of the real economy should be taken into account, rather than counting the prospects of currency movement on the stock exchange. The Australian dollar is supported by the rate of mining and processing of minerals, the level of agricultural development – 12% of GDP, the level of exports. If demand for Australian products declines in the global market, the price of AUD will decline, otherwise the exchange will have a smooth increase in dollar liquidity.
When making trade deals at AUD, it must be taken into account that, in addition to high interest rates, the currency has real shortcomings that can turn against the trader: the country’s large external debt and frequent crises in housing credit policy. Much more factors will have to be taken into account when calculating the Australian Dollar ‘s movement prospects than for other currencies.