The Australian dollar is one of the commodity currencies actively traded on the Forex market.
The reasons of such popularity of the volatile AUD are the Australian high key interest rate, stability of the national economy, and close relationship between the currency and gold.
Australia is one of the world’s largest producers of gold. The precious metal’s share in the country’s exports is about 7 percent (ranked third after coal and iron ore exports). An increase in global gold prices boosts Australian economic growth and strengthens its national currency.
Experts say that in 80 percent of cases the AUD/USD pair and gold price movements coincide. Close correlation between the Aussie and gold enables traders to forecast the currency price movements according to the gold price movements. Moreover, the gold price changes earlier than the currency exchange rate. Given the fact that gold is a quite safe anti-inflationary instrument for capital, the Australian dollar is often used for risk diversification while trading on the currency market.
Beginners to the world of Forex are advised to trade the Australian dollar as its exchange rate is relatively stable and quite easy to forecast. At the same time, while estimating the future movement of the currency rate, you should be guided not only by gold prices, but also by macroeconomic indicators of the Australian economy on the whole.