A major pair and one of the most heavily traded currency pairs in the world, the AUD/USD accounts for nearly 7% of global Forex trading and is linked to commodity prices. The commodity price link is due to the Australian economy’s reliance on commodity exports. The AUD/USD is also very sensitive to Chinese economic data, due to the close association between Australian exports and the Chinese economy.
Because it is so heavily traded, the AUD/USD is less volatile than many minor and exotic currency pairs. But its close link to commodity prices and Chinese economic data means that price movement can be sudden at times. The highest volume trading for the AUD/USD is usually the end of the US trading day until the Asia-Pacific’s trading day midpoint. Spreads are generally tight, about 1.5 pips on average, but are often below 1 pip if you trade with an Australian broker.
Common events that affect the price movement of the AUD/USD are major announcements on interest rates by the Reserve Bank of Australia and the Federal Reserve and the release of economic data that measures the economic health of Australia and China. The price of iron, gold, coal, and copper are also key factors in the price. Being the world’s foremost haven currency, the USD tends to strengthen against the AUD during economic downturns and times of financial instability.
The table below shows the Forex brokers with the lowest trading costs for AUD/USD, including the spread and commission. It also details the industry average spread and industry average trading cost for 1 lot of AUD/USD.
