Course history

In 1910, the Australian pound (A£) was introduced with the equivalent of the pound sterling (£1=£1 UK). Like the British pound, it was divided into 240 pence, or 20 shillings (12 pence each). In December 1931, the Australian currency was devalued by 25%, resulting in one pound five Australian shillings equal one pound sterling.

The Australian dollar was introduced relatively recently, in 1966, replacing the previously used Australian pound. With this change, various naming possibilities were considered, such as emu, royal or kanga, but the dollar, popularly known as "Aussie", was chosen. In 1984, the paper one-dollar bill was replaced by a coin. Four years later, a similar change was made with the two-dollar bill, which also made the two-dollar coin a coin.

Top currency pairs

Virtually every participant of Webinar Universe has the ability to trade AUD in their offer. Currency pairs with the Australian dollar (AUD) as one of the base currencies require in-depth fundamental and technical analysis to make informed investment decisions. Here are some of the most important currency pairs with AUD and their characteristics:

• AUD/USD (Australian Dollar to US Dollar) - This pair is highly correlated with commodity prices, especially the price of gold and copper, which are important exports of Australia. It is influenced by macroeconomic data from Australia and the US, such as inflation rates, interest rates, and employment data,
• AUD/JPY (Australian Dollar to Japanese Yen) - This is a currency pair with a strong risk association. It often reacts to changes in the stock markets, especially in the case of the Japanese market (Nikkei). It is also closely related to trends in the raw materials market, as well as the economic situation in Australia and Japan;
• EUR/AUD (Euro to Australian Dollar) - This pair is often used by traders to analyze the situation on the commodity market in relation to the Eurozone economy. The AUD/EUR exchange rate may also be susceptible to changes in the monetary policy of the European Central Bank and the Reserve Bank of Australia;
• AUD/CAD (Australian Dollar to Canadian Dollar) – Both currencies are closely linked to the commodity sector, so the pair is susceptible to changes in the prices of commodities such as crude oil and metals. The economic situation in Australia and Canada, as well as changes in the monetary policy of their central banks, may affect the pair's rate.

Course Factors

The Australian dollar ranks fifth in terms of importance in the Forex market. The US dollar, euro, Japanese yen, pound sterling and several other currencies that we talk about on Webinar Universe are ranked higher. The Reserve Bank of Australia, founded in 1960, is responsible for controlling the Australian currency.

Interest rate decisions by the Bank of Australia Reserve (RBA) have a significant impact on the value of the Australian dollar. High interest rates attract foreign capital, increasing demand for the Australian dollar and increasing its value. Changes in the RBA's monetary policy expectations can also affect the exchange rate.

Australia is also a large exporter of raw materials such as iron ore, coal, gold, and other natural resources. Changes in the prices of these commodities can affect the exchange rate of the Australian dollar, as they affect the trade balance and the overall health of the country's economy. This is the main reason for the stability of the Australian currency.

Future predictions

Forecasts for the Australian dollar (AUD) against the US dollar (USD) suggest further declines in the coming year. According to foreign media, investors are reacting to a less hawkish monetary policy message, and Governor Bullock's statements are putting additional pressure on the Australian dollar.

If selling pressure intensifies, the AUD/USD pair could breach the significant 200-SMA trendline around 0.6560. A loss of this level could lead to a drop to the March low of 0.6477 and then to the lowest level in 2024 at 0.6442. Analysts from Westpac (an Australian multinational banking and financial services company) also commented on the situation of the Australian dollar. According to their forecast, the Reserve Bank of Australia (RBA) may decide to raise interest rates in August and September. As a result, the rate level, currently at 4.10%, could rise to 4.60% and peak. However, Westpac points out that the RBA may also change its policy. Interest rate cuts in Australia are forecast to start from May 2024.

To sum up, the condition of the Australian economy, the monetary policy pursued by the Reserve of the Bank of Australia, changes in global financial markets, as well as the current prices of raw materials (including energy resources) and the geopolitical situation, have a key impact on the development of the AUD exchange rate. Understanding these factors can be crucial for investors and entrepreneurs planning to trade the Australian dollar, and for those following changes in the financial markets. It will also be valuable to monitor long-term trends that could affect the future exchange rate of the Australian dollar. For more information, please visit our training platform.