AUD Exchange Rate Policies

Changes in Australian dollar exchange rates take place slightly differently than they do in other countries. The balance of trade in Australia has depended for many years primarily on exports of natural resources such as agricultural products and minerals. As a result, the relative value of the Australian dollar can change by great amounts during the business year. When global booms occur, during which raw materials may be exported in great numbers from Australia, the dollar can rally significantly. However, at times when the prices of minerals slump or when spending in Australia surpasses the outlook for export earnings, the value of the dollar may decline. This propensity for change relative to the international economy typically occurs in the opposite direction with the majority of other major currencies on the market, which tend to increase in popularity during domestic slumps as traders transfer fiscal value into cash from stocks that are falling. Due to this high volatility and unusual pattern of movement in exchange rates, the Australian dollar has become one of the currencies that is traded most frequently on the global market.

Related Articles: