Currency pair GBPAUD

The choice of the Forex currency pair with which a trader will work directly determines his performance. The subtleties of the movement of the instrument, the factors that influence both currencies separately and what the exchange rate is based on, is the basis for making the right trading decisions.

GBPAUD is a trading instrument that combines two national currencies, the British pound and the Australian dollar.

To understand the mechanism of plotting a chart, when you see this symbol, you must clearly understand that the chart displays the number of Australian dollars that must be paid for 1 British pound.

Both of these currencies are slightly inferior in terms of money supply turnover to such giants as the dollar and the euro, but they confidently occupy the fourth and fifth places in the world in terms of global volume.

This is why this instrument is so popular among traders. To understand what factors can influence a currency pair's exchange rate, it's necessary to take a closer look at each country individually.

British pound (GBP).

The GBP is one of the world's oldest currencies and is the national currency of the United Kingdom. Its exchange rate is influenced by both internal and external factors.

Among domestic factors, it's especially worth paying attention to the macroeconomy, particularly indicators such as unemployment, inflation, interest rates, GDP, trade balance , and much more. It's also worth remembering that London is home to the world's second-largest financial center, where prices are actively determined.

External factors that influence the pound include foreign economic ties with partner countries. Britain has strong economic ties with the US and Europe, so collapses in these global markets and deteriorating economic conditions in partner countries have a significant impact on the GBP exchange rate.

Australian dollar (AUD).

The Australian Dollar (AUD) is the national currency of Australia. The Australian dollar is rightfully considered a commodity currency, so commodity prices have the strongest impact on the AUD. Almost 70 percent of the Australian economy and exports are linked to major partner countries such as China, Japan, and the United States.

It's worth noting that Australia is a leading producer of gold and many other precious metals. Australia also has gas and oil reserves. While its manufacturing industry is relatively underdeveloped, it accounts for 15 percent of exports.

In addition to the obvious factors of the commodity market, the Australian dollar's exchange rate is influenced by weather conditions and global prices for agricultural products, given that Australia is an agricultural country.

However, despite obvious external factors, domestic macroeconomic indicators such as GDP, trade balance, unemployment, inflation, and retail sales have one of the strongest influences on the AUD. This pattern can be seen when news is released on any AUD-related currency pair.

In addition, I would like to note the high interest rate in Australia, which allows the currency to be actively used in such trading tactics as carry trade ( http://time-forex.com/terminy/karry-trade ).

In conclusion, it can be noted that the GBPAUD is a cross rate and the only thing they have in common is a strong external dependence on trade with a common economic partner, the United States.

Beyond fundamental factors, GBPAUD lends itself well to technical analysis, as both instruments together create long, low-volatility trend movements, allowing even a beginner to quickly get up to speed.