15.03.2021

Special factors that affect the course of the Australian dollar

The process of monitoring interest rates and inflation growth rates is also complicated by the large dependence of Australia from commodity and relatively underdeveloped internal industrial base. This led the country to large and practically constant balance of payments, which are recorded since the end of the 2nd World War. And although the external debt of Australia is low as a percentage of GDP, but the increase in government spending makes this problem more and more relevant.

Australian currency for rarity volatile and non-cyclic. Most leading developed countries conduct trade in Tandem with each other (partially due to close trade relations between them), but everything is completely different with Australia. The volume of export industrial goods is relatively small, and most of the Australian exports are directed to the developing countries of Asia. And although Australia has a certain degree of independence from leading countries of the world, the health of the internal economy is in a very close connection with commodity prices. In the past, the volatility of prices for raw materials caused the impressive fluctuations in the national currency exchange rate.

Trade "Kerry Trade"

The Australian dollar has half of the Kerry Trade transactions with the participation of the yen. Interest rates in Japan are very low in relation to Australian, and time zones in countries partially coincide, therefore assets denominated in the national currency of Australia are attractive to traders that use the Kerry Trade strategy. Given this circumstance, rumors about changing interest rates in any of the countries may have an incommensurable impact on the exchange rate.