What is the Australian Dollar (AUD)?
AUD (Australian Dollar)
Forex Trading Glossary
Quick Answer: The Australian Dollar is a commodity-linked currency driven by exports, Chinese demand, and Reserve Bank of Australia policy.
What is the AUD?
The Australian Dollar (AUD) is a commodity-linked currency influenced by export demand, Reserve Bank of Australia policy, and global risk sentiment. Traders watch AUD crosses—especially AUD/USD and AUD/JPY—to express views on growth, Chinese demand, and carry trades.
Macro Drivers
- Commodity exports: Iron ore, coal, and LNG revenue create a tight link between AUD and global industrial activity.
- China dependency: China is Australia’s largest trading partner; Chinese PMI and stimulus headlines move AUD pairs.
- Interest-rate differentials: The RBA’s cash rate determines carry appeal versus the USD or JPY.
- Risk appetite: AUD tends to strengthen in risk-on environments and weaken during safe-haven flows.
Popular Crosses
AUD/USD ("Aussie") reflects U.S. versus Australian policy. AUD/JPY tracks global risk appetite, while AUD/NZD highlights Australasian growth differentials.
Trading the Aussie
- Monitor data: Watch Australian CPI, employment, and commodity price indexes.
- Follow the RBA: Minutes and speeches guide rate expectations.
- Combine tech and macro: Use chart patterns to time trades aligned with fundamental bias.
- Hedge exposure: Corporations use AUD hedges to manage export revenue swings.
Related Terms
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