AUSD Dive Slows as Australia and China Agree Trade Deal

Whether you’re a first-time forex trader or you’re already well established in the market, a trend like the one we witnessed last week from the AUSD was one …

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Whether you’re a first-time forex trader or you’re already well established in the market, a trend like the one we witnessed last week from the AUSD was one that we’re not likely to see again for a long time.

Last week, the AUSD against the EUR dropped to1.4297, making it an excellent time to trade against for AUSD from USD, GBP or EUR.

In fact, most currency containing AUSD last week would have seen the other currency in a favorable light. It was – therefore – quite the catastrophe for the AUSD, but a great time for forex traders the world over.

Sterling/AUSD

Over the past couple of months, GBP/AUSD has had a relatively rough time, with volatility and chaos across the market. This has made the currency pairing relatively difficult to trade, and the market has seen a bearish trend.

This trend reversed last week, where the AUSD saw a bump against the GBP at 1.8048.

Volatility through the RBA

Meanwhile, however, Australia has not been faring particularly well on its own, as the Reserve Bank of Australia (RBA) has had to step in and consider market action facilitated by the central bank.

This has stirred up a storm with the AUSD, and caused potential investors to remain cautious or inactive.

Trade Deals with China

Over the last week, with the AUSD trading so poorly, it has been a great time to invest in the currency.

However, Australia has just signed a free trade agreement with China for 2015, a result of 10 whole years of negotiations.

For Australia, this means greater access to the world’s second largest market, and tariffs on 95% of Australian products are to be removed once the deal is done.

Australian Government Holds Their Breath…

The impact of this deal has been significant and almost immediate, with the AUSD/USD trading at 0.32% higher at 0.8737.

What this ultimately means, then, is the days of AUSD buying might be over. However, if you’re on a forex platform like this one that has live charting, you should remain ready to invest if the hype around the China trade deal dies down and the same negatively sloping trend reemerges. 

It might not be the best time in the world to trade against the AUSD, and we might not see the lows that we witnessed last week, but be on your guard – don’t say we didn’t warn you.

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