{"id":9890,"date":"2022-10-14T06:07:31","date_gmt":"2022-10-14T06:07:31","guid":{"rendered":"https:\/\/mdr.foobrdigital.com\/?p=9890"},"modified":"2022-10-14T06:07:31","modified_gmt":"2022-10-14T06:07:31","slug":"australia","status":"publish","type":"post","link":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/2022\/10\/14\/australia\/","title":{"rendered":"Australia"},"content":{"rendered":"\n

Officially known as the Commonwealth of Australia<\/strong>, Australia could be found somewhere in the Southern Hemisphere, just southeast of Asia.<\/p>\n\n\n\n

Considered the world\u2019s biggest island, Australia is the only country on earth that governs an entire continent!<\/p>\n\n\n\n

Before the coming of settlers from Europe in 1788, Aboriginal people inhabited most of the country.<\/p>\n\n\n\n

Since then, people from all over the world have migrated to Australia, which has made it one of the most culturally diverse countries in the world.<\/p>\n\n\n\n

Now, Australia is home to people from 200 different countries.<\/p>\n\n\n\n

Lastly, and probably most importantly, Australia is known for producing the meanest and most hardcore actors of all time like Mel Gibson, the Braveheart; Hugh Jackman, the Wolverine; and the legendary Heath Ledger, the Joker!<\/p>\n\n\n\n

To add to that, they also have mech-kangaroos, battle tank armadillos, and bomber pelicans. You can see how the rest of the world really had no choice but to name an entire continent after them.<\/p>\n\n\n\n

\"Australia\"<\/figure>\n\n\n\n
\"Australia<\/figure>\n\n\n\n

Australia: Facts, Figures, and Features<\/h2>\n\n\n\n
  • Neighbors:<\/strong>\u00a0New Zealand, Papua New Guinea, Indonesia<\/li>
  • Size:<\/strong>\u00a02,969,907 square miles<\/li>
  • Density:<\/strong>\u00a07.3 people per square mile<\/li>
  • Capital City:<\/strong>\u00a0Canberra (population 358,222)<\/li>
  • Head of State:<\/strong>\u00a0Queen Elizabeth II<\/li>
  • Head of Government:<\/strong>\u00a0Prime Minister Scott Morrison<\/li>
  • Currency:<\/strong>\u00a0Australian dollar (AUD)<\/li>
  • Main Imports:<\/strong>\u00a0Machinery and transportation, electrical and telecommunications equipment; crude oil and petroleum products<\/li>
  • Main Exports:<\/strong>\u00a0Ores and metals; wool, food and live animals; fuels, transport machinery and equipment, Hugh Jackman, Nicole Kidman, Heath Ledger<\/li>
  • Import Partners:<\/strong>\u00a0China 18.4%, U.S. 11.7%, Japan 7.9%, Singapore 6%, Germany 4.6%, Thailand 4.2%, South Korea 4.1%<\/li>
  • Export Partners:<\/strong>\u00a0China 29.5%, Japan 19.3%, South Korea 8%, India 4.9%<\/li>
  • Time Zone:<\/strong>\u00a0GMT +10<\/li>
  • Website:<\/strong>\u00a0https:\/\/www.australia.gov.au\/<\/li><\/ul>\n\n\n\n

    Economic Overview<\/h2>\n\n\n\n

    Compared to G7 nations, Australia\u2019s overall economy is relatively small. According to the World Bank, however, on a per-person basis, its GDP is even higher than the U.K., Germany, and even the U.S.!<\/p>\n\n\n\n

    In the past fifteen years or so, Australia\u2019s economy has grown an average of 3.6% annually, well above the 2.5% world norm. No wonder it ranked third overall in the Legatum Institute\u2019s 2011 Prosperity Index!<\/p>\n\n\n\n

    Australia\u2019s economy is highly service-oriented, with over 70% of its GDP coming from industries such as finance, education, and tourism.<\/p>\n\n\n\n

    Despite having a very robust export industry and stellar growth, Australia has been notoriously famous for consistently having a high current account deficit.<\/p>\n\n\n\n

    This means that Australia is using up more resources from other economies to satisfy its own domestic consumption.<\/p>\n\n\n\n

    Monetary & Fiscal Policy<\/h2>\n\n\n\n

    The Reserve Bank of Australia (RBA) is the main governing body of Australia when it comes to monetary and fiscal policy. The RBA\u2019s aim is three-fold:<\/p>\n\n\n\n

    1. Keep exchange rates stable<\/li>
    2. Ensure growth<\/li>
    3. Maintain full employment<\/li><\/ol>\n\n\n\n

      In order to do this, the bank believes that the country\u2019s annual inflation rate must be kept within 2-3%.<\/p>\n\n\n\n

      By keeping a tight rein on inflation, the value of their domestic currency is secured, which will eventually lead to sustainable economic growth.<\/p>\n\n\n\n

      How does the RBA make sure inflation is controlled? Two ways: adjusting the cash rate and conducting open market operations.<\/p>\n\n\n\n

      The cash rate is the interest rate charged by lending banks on overnight loans to other financial institutions.<\/p>\n\n\n\n

      Open market operations, on the other hand, is the way the RBA controls the money supply through the buying and selling of government loans or other financial assets.<\/p>\n\n\n\n

      With the exception of January, the RBA meets monthly to discuss what changes it will make to monetary policy.<\/p>\n\n\n\n

      To make this easier to swallow, take this simple example. Let\u2019s say that inflation in Australia is increasing much faster than what the bank wants.<\/p>\n\n\n\n

      In order to suppress the high inflation rate, the bank decides to raise the cash rate, which will effectively increase the cost of borrowing by\u2026. uh, borrowers.<\/p>\n\n\n\n

      Naturally, this move will tone down lending, lessening the overall money in circulation. And basic supply and demand tell us that the scarcer something is, the more valuable it is!<\/p>\n\n\n\n

      Getting to Know the AUD<\/h2>\n\n\n\n
      \"Travel<\/figure>\n\n\n\n

      Even though they\u2019ve got their seasons mixed up, the Australians are always up bright and early to play. Well, this is mostly because the Australian market is the first to open every week!<\/p>\n\n\n\n

      Just like the people inhabiting the place, Australia\u2019s local currency, the AUD, is called the Aussie.<\/p>\n\n\n\n

      I\u2019m called a commodity dollar for a reason\u2026<\/h3>\n\n\n\n

      One important characteristic of the AUD is that it has a high positive correlation with gold prices.<\/p>\n\n\n\n

      The reason behind this is that Australia is the third biggest gold-digger\u2026 errr, gold producer in the world. As a result, whenever the price of gold rises or falls, the AUD goes along for the ride.<\/p>\n\n\n\n

      \u2026 and I\u2019m one of the best candidates for carry trade.<\/h3>\n\n\n\n

      Among the major currencies, the AUD has been known for having a high interest rate. This makes it a favorite for carry trades.<\/p>\n\n\n\n

      Carry trade is the practice of buying a currency with a high interest rate in exchange for a currency with a lower interest rate.<\/p>\n\n\n\n

      I\u2019m only awake a couple of hours a day\u2026<\/h3>\n\n\n\n

      Most of the AUD\u2019s movement happens during the Asian trading session, the time when economic data from Australia is released.<\/p>\n\n\n\n

      \u2026 but bad weather is one of my worst enemies!<\/h3>\n\n\n\n

      Given the commodity-based economy of Australia, unfavorable weather conditions tend to put a serious strain on Australia\u2019s growth, which leads to a sell-off in the AUD.<\/p>\n\n\n\n

      How severely do weather conditions affect AUD?<\/p>\n\n\n\n

      Well, let\u2019s just say that during the Australian drought of 2002, AUD\/USD fell to .4770 \u2013 that is almost half its current exchange rate!<\/p>\n\n\n\n

      Important Economic Indicators for Australia<\/h2>\n\n\n\n

      Consumer Price Index<\/strong> \u2013 Because the RBA\u2019s primary goal is controlling inflation, the CPI, which measures the overall change in the price of consumer goods and services, is closely watched by the bank.<\/p>\n\n\n\n

      Balance of Trade<\/strong> \u2013 Australia has an extremely robust trade sector so currency traders and bank officials alike tend to watch changes in the country\u2019s export and import levels.<\/p>\n\n\n\n

      Gross Domestic Product<\/strong> \u2013 This measures how well Australia\u2019s economy is doing. Positive readings indicate economic growth while negative readings mean economic contraction.<\/p>\n\n\n\n

      Unemployment Rate<\/strong> \u2013 The unemployment rate tracks how many people in Australia\u2019s labor force are out of work. The number of people employed, or rather, unemployed in this cause, has a high correlation with economic activity. A person without a job means he has less money available for spending.<\/p>\n\n\n\n

      What Moves the AUD<\/h2>\n\n\n\n

      Economic and Interest Rate Outlook<\/h3>\n\n\n\n

      The AUD is greatly affected by macroeconomic factors such as monetary policy rhetoric, interest rates, and domestic economic data.<\/p>\n\n\n\n

      When trading AUD, always pay special attention to the interest rate outlook. Comments made by officials from the RBA regarding interest rates, for instance, could create a hefty impact on the AUD.<\/p>\n\n\n\n

      China\u2019s Economy<\/h3>\n\n\n\n

      For the better part of the last decade, China has been on a roll, posting some massive growth figures. In order to create finished goods, China sources a lot of its raw materials like coal and iron ore, from Australia.<\/p>\n\n\n\n

      For China to buy raw materials from Australia, it must first need to exchange its local currency for the AUD. This means that increased demand for Chinese goods tends to prop up the AUD\u2019s value.<\/p>\n\n\n\n

      Likewise, a decline in demand for Chinese products could lead to a fall in the AUD\u2019s value.<\/p>\n\n\n\n

      New Zealand Data<\/h3>\n\n\n\n

      To a lesser extent, data from New Zealand influences the AUD\u2019s price action. Take note that New Zealand\u2019s economy is very similar to Australia, which makes their currency positively correlated.<\/p>\n\n\n\n

      In fact, the relationship of the two countries is sometimes described as \u201cTrans-Tasman\u201d to show how closely tied their economies are and to indicate the existence of the Tasman Sea sitting right between them.<\/p>\n\n\n\n

      With that said, it is important to be aware of important upcoming data from New Zealand as it could indirectly cause the AUD to move.<\/p>\n\n\n\n

      Trading AUD\/USD<\/h2>\n\n\n\n

      AUD\/USD is traded in amounts denominated in AUD. Standard lot sizes are 100,000 AUD and mini lot sizes are 10,000 AUD.<\/p>\n\n\n\n

      The pip value, which is denominated in U.S. dollars, is calculated by dividing 1 pip of AUD\/USD (that\u2019s 0.0001) by the AUD\/USD\u2019s current rate.<\/p>\n\n\n\n

      Profit and loss are denominated in U.S. dollars.<\/p>\n\n\n\n

      For one standard lot position size, each pip movement is worth 10 USD.<\/p>\n\n\n\n

      For one mini lot position size, each pip movement is worth 1 USD.<\/p>\n\n\n\n

      Margin calculations are based on U.S. dollars. For example, if the current AUD\/USD rate is 0.9000 and the leverage is 100:1, 900 USD is needed in available margin to be able to trade on a standard lot of 100,000 AUD.<\/p>\n\n\n\n

      However, as AUD\/USD rises, a larger available margin in USD is required. Conversely, the lower AUD\/USD rate is, the less required available margin is needed.<\/p>\n\n\n\n

      AUD\/USD Trading Tactics<\/h2>\n\n\n\n

      Since the AUD is one of the best candidates for carry trade, which is the buying of a currency with high interest rates and the selling of a currency with low interest rates, AUD\/USD is highly affected by crosses.<\/p>\n\n\n\n

      How can you use this to your advantage?<\/p>\n\n\n\n

      Well, if you see a break of a significant technical support level in AUD\/JPY, that could be a good sign to sell AUD\/USD!<\/p>\n\n\n\n

      Another thing to consider when trading AUDUSD is data coming out from New Zealand. Because of Australia\u2019s nearness and trade relations with New Zealand, positive economic data from New Zealand usually helps push the AUD\u2019s value up.<\/p>\n\n\n\n

      This means that better-than-expected New Zealand economic reports could be seen as a good signal to buy the AUD. Conversely, poor economic data from New Zealand could be a reason to sell the AUD.<\/p>\n\n\n\n

      Lastly, take some time to look at how commodity prices, especially gold are doing. More often than not, the price of gold leads the AUD.<\/p>\n\n\n\n

      This means that whenever the gold rises in value, AUD\/USD could rally soon after! Of course, when the value of gold falls, the AUD also tends to follow suit.<\/p>\n\n\n\n

      \"Australian\"<\/figure>\n\n\n\n

      <\/p>\n","protected":false},"excerpt":{"rendered":"

      Officially known as the Commonwealth of Australia, Australia could be found somewhere in the Southern Hemisphere, just southeast of Asia. Considered the world\u2019s biggest island, Australia is the only country on earth that governs an entire continent! Before the coming of settlers from Europe in 1788, Aboriginal people inhabited most of the country. Since then, people […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[856],"tags":[],"_links":{"self":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9890"}],"collection":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/comments?post=9890"}],"version-history":[{"count":0,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9890\/revisions"}],"wp:attachment":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/media?parent=9890"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/categories?post=9890"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/tags?post=9890"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}