AUD/USD (Australian Dollar/U.S. Dollar)

DEFINITION of 'AUD/USD (Australian Dollar/U.S. Dollar) '

The abbreviation for the Australian dollar and U.S. dollar (AUD/USD) currency pair or cross. The currency pair tells the reader how many U.S. dollars (the quote currency) are needed to purchase one Australian dollar (the base currency)

Trading the AUD/USD currency pair is also known as trading the "Aussie".

BREAKING DOWN 'AUD/USD (Australian Dollar/U.S. Dollar) '

The value of the AUD/USD pair is quoted as 1 Australian dollar per X U.S. dollars. For example, if the pair is trading at 1.50 it means that it takes 1.5 U.S. dollars to buy 1 Australian dollar.

The AUD/USD is affected by factors that influence the value of the Australian dollar and/or the U.S. dollar in relation to each other and other currencies. For this reason, the interest rate differential between the Reserve Bank of Australia (RBA) and the Federal Reserve (Fed) will affect the value of these currencies when compared to each other. When the Fed intervenes in open market activities to make the U.S. dollar stronger, for example, the value of the AUD/USD cross could decline, due to a strengthening of the U.S. dollar when compared to the Australian dollar.

The AUD/USD tends to have a negative correlation with the USD/CAD, USD/CHF and USD/JPY pairs because the AUD/USD is quoted in U.S. dollars, while the others are not. The correlation with USD/CAD could also be due to the positive correlation of the Canadian dollar and the Australian dollar (because they both have similar economic structures because they are both resource-based economies).

RELATED TERMS
  1. USD/CAD (U.S. Dollar/Canadian Dollar)

    The abbreviation for the U.S. dollar and Canadian dollar (USD/CAD) ...
  2. Currency Pair: EUR/USD (Euro/U.S. ...

    The abbreviation for the euro and U.S. dollar (EUR/USD) pair ...
  3. AUD (Australian Dollar)

    The currency abbreviation for the Australian dollar (AUD), the ...
  4. NZD/USD (New Zealand Dollar/U.S. ...

    The abbreviation for the New Zealand dollar and U.S. dollar (NZD/USD) ...
  5. AUD

    In the currency market, this is the abbreviation for the Australian ...
  6. USD/JPY (U.S. Dollar/Japanese Yen) ...

    The abbreviation for the U.S. dollar and Japanese yen (USD/JPY) ...
Related Articles
  1. Forex Education

    AUD/USD: Trading The "Aussie"

    Forex traders like "trading the Aussie" in large amounts.
  2. Forex Education

    USD/CAD

    This pairing, known as "trading the loonie", is one of the most heavily traded in the forex market.
  3. Forex Education

    Top 6 Most Tradable Currency Pairs

    The most frequently traded currency pair is the euro/U.S. dollar. The euro is the base currency in the pairing, while the dollar is the quote currency.
  4. Forex Education

    Forex Tutorial: Reading a Forex Quote and Understanding the Jargon

    One of the biggest sources of confusion for those new to the currency market is the standard for quoting currencies. In this section, we'll go over currency quotations and how they work in ...
  5. Forex Education

    Forex Currencies: Conclusion

    By Brian Perry Conclusion The currency markets are the largest and most actively traded financial markets in the world with daily trading volume of more than $3 trillion (Triennial Central ...
  6. Forex Education

    Forex Currencies: Currency Cross Rates

    By Brian PerryWhile the majority of currency trading involves the U.S. dollar, major international currencies also trade among themselves. A currency trading pair that does not involve the U.S. ...
  7. Forex Education

    What is an Indirect Quote?

    An indirect quote expresses the amount of foreign currency required to buy or sell one unit of the domestic currency in the foreign exchange markets.
  8. Forex

    Bond Spreads

    Although there may be risks to using bond spreads to forecast currency movements, proper diversification and close attention to the risk environment will improve returns.
  9. Forex Education

    How Do You Make Money Trading Money?

    Making money in the foreign exchange market is a speculative process. You are betting that the value of one currency will increase relative to another.
  10. Mutual Funds & ETFs

    USDU: WisdomTree Bloomberg US Dllr Bullish ETF

    Explore an analysis of information on the WisdomTree Bloomberg U.S. Dollar Bullish Fund, a currency ETF that tracks the overall performance of the U.S. dollar.
RELATED FAQS
  1. Why is currency always quoted in pairs?

    When reading currency quotes, you have probably noticed that there is only a single quote for a pair of currencies. Currency ... Read Answer >>
  2. What do the terms weak dollar and strong dollar mean?

    The two terms, weak dollar and strong dollar, are generalizations used in the foreign exchange market to describe the relative ... Read Answer >>
  3. How can I trade in cross currency pairs if my forex account is denominated in U.S. ...

    The forex market allows individuals to trade on nearly all of the currencies in the world. However, most of the trading is ... Read Answer >>
  4. Why is the U.S. dollar shown on the top of some currency pairs and on the bottom ...

    All currencies are traded in pairs. The first currency in the pair is called the base currency while the second is called ... Read Answer >>
  5. Why isn't the EUR/USD currency pair quoted as USD/EUR?

    In a currency pair, the first currency in the pair is called the base currency and the second is called the quote currency. ... Read Answer >>
  6. How are foreign exchange rates affected by commodity price fluctuations?

    In the foreign exchange (forex) market, currency valuations move up and down as a result of many factors, including interest ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center