Does the Australian Dollar Move Up Or Down When the World Economy Shakes Up?
So, are you wondering if the UK is getting a break from all the UK based exchange rates or if we are still just one of those currency pair that will be affected by the economic state of the United States and other nations around the world? Well the good news is that the USD/JPY is not the only major currency pair that has become a volatile commodity and this has become more obvious since September and October.
We all know that the Federal Reserve has been looking out for a good economic time to raise interest rates and that the higher rates will certainly make those foreign currencies more expensive for them to hold. So, if the United States government sees that their economy is still recovering from the past recession they will certainly be looking at some rate increases. That will be something that everyone who trades this financial market will have to learn about.
But the thing that you need to know about the AUDUSD is that it will not have a direct impact on your normal currencies that you trade. And in fact the AUDUSD has been showing a very strong relationship with other currencies so far in the first half of the year. You can see how those rates for these other currencies are affected by the AUDUSD.
So, if the United States is holding an annual budget deficit, the international oil market will definitely be impacted by this when this comes into play. And if the US economy grows by 2% each quarter that is going to cause the oil market to react accordingly.
You will have seen that the United States is becoming more important for the international financial market. That is why the other major currencies around the world are becoming more attached to this. If there is no way for the United States to offset the growth in its economy then the international economic crisis will begin to affect other countries around the world.
The international financial crisis is causing companies around the world to cut their earnings to the bone to remain competitive. And because of this the AUDUSD will continue to rise and will be followed by many other currencies as well.
So, in effect, there is no doubt that the AUDUSD is now a major force in the international financial market. It is now being traded at a lower price than it was at the beginning of the year and this is something that we could all do our part to try to get some value out of it. The only problem is that it does not affect the currency pairs that we trade today.
That is something that is keeping the AUDUSD relevant but still at the same time it is now being traded at a lower price than what it was at the beginning of the year. It will take many weeks for us to learn about the economy of the United States and to get a feel for what the Federal Reserve will be doing next. For this reason the AUDUSD is also unpredictable.
Now, when the United States decides to reduce interest rates that will certainly cause the AUDUSD to continue to rise. Of course, this will be quite scary for a lot of people in Europe who are dealing with these policy decisions every day and if the AUDUSD continues to go up then it could easily mean a hard economic times ahead for a lot of countries.
One thing is certain though and that is that if the United States is seen to have a slower economic recovery than normal, then the IMF will surely look at the Foreign Exchange Market to see if it is willing to accept this change. For these reasons, the AUDUSD will become much more volatile over the next couple of months.
There are some new trends coming into the fore in the next few months and this will surely lead to a surge in this particular currency. The trend will continue to go down so the AUDUSD is likely to continue to go up in the coming months.
For this reason, we would suggest that you pay close attention to the changes that have been seen in the financial markets over the past few days. The AUDUSD has gone on a tear this year and the economic forces that are coming into play will really shake things up.