eToro – Forex Trading Forum

[djsheckie]

Since Canada's currency is so linked with the trading of curde oil, plenty of traders and investors use the Canadian dollar as either a hedge against current commodity positions or sometimes as a pure speculation used to trace signals from the oil market.

That's more or less all the overview of important facts about the Canadian dollar that you'll need to start. We'll now move on to the southern hemisphere a take a loook at what's happening down under in our discussion of the Australian dollar.

Australian Dollar - AUD
Central Bank: Reserve Bank of Australia - RBA
Current Interest Rate: http://www.rba.gov.au/

[djsheckie]

The Australian dollar, as well as the New Zealand dolllar which we'll get to next is generally a carry favorite. Don't worry if you aren't sure what carrying is I'll try to cover that next week. Just know that it is a different setup.

Since it offers one of the higher interest rates in the major global markets, the Reserve Bank of Australia has always upheld price stability and economic strength as cornerstones of its long-term plan. The reserve bank is lead by it's governor. The RBA's board is made up of six members-at-large, in addition to a deputy governor and a secretary of the Treasury. Together, they work toward to target inflation between 2-3%, while meeting at 9 times throughout the year.

[djsheckie]

As mentioned previously the currency is often a favorite of carry traders, this is largely due to the Australian offering one of the highest yields of the seven major currencies available on most platforms.

As a result of this, you'll see a fair amount of volatility can be experienced in this pair if a deleveraging effect takes place. If this doesn't occur then you can expect the Australian dollar to trade within averages of 30-40 pips, like pretty much any oof the other major currencies. It is also worth noting that the Australian dollar maintains a relationship with commodities, most notably silver and gold.

[djsheckie]

That more or less raps up the Australian dollar so we'll hop next door to cover the New Zealand dollar.

New Zealand Dollar - NZD
Central Bank: Reserve Bank of New Zealand – RBNZ
Current Interest Rate: http://www.rbnz.govt.nz/

As mentioned in the previous entry New Zealand is also a carry trading favorite. In similar fashion to the Australian dollar, the Reserve Bank of New Zealand looks to promote inflation targeting, hoping to maintain a foundation for prices.

Also similar to the Australian dollar, the New Zealand dollar can experience great volatility with deleveraing but will otherwise trade within averages of 30-40 pips, like the other major currencies. The NZD also maintains a relationship with commodities, primarily silver and gold.