Aussie Dollar AUD Benefits From ECB Policy

Aussie Dollar AUD is expected to extend gains after the ECB unprecedented easing boosted the demand for this currency. “The Australian dollar does appear to be one of the attractive options for investors as they ponder ongoing ECB liquidity creation,” said Sean Callow, a senior currency strategist at Westpac in Sydney. “It does seem that the market response to the ECB’s raft of easing measures is to buy everything not nailed down,” except the U.S. dollar, he said. You should know this that ECB actions won’t solve EURO ZONE problems.

If you are trading AUD pairs like AUD/USD, AUD/JPY, AUD/EUR, AUD/CAD, AUD/NZD etc then you should know this that Aussie Dollar AUD is a commodity currency. Australia is a big exporter of commodities to China and the rest of the world. This makes AUD highly susceptible to commodity market news. If there is some bad commodity market news, you will see AUD also tanking. Did you read the post ECB QE? Keep this in mind Australia is a big exporter of commodities to China. An economic slowdown in China is going to depreciate AUD a lot.

Now it is a good idea to master fundamental analysis if you want to trade currencies. Fundamental analysis entails taking a few courses in macroeconomics. If you are trading Australian Dollar AUD, then you should know Australian economic fundamentals. You should know what is the driving force behind Australian economy. As said above Australian economy is basically been driven by its commodity exports. Australian economy today is highly dependent on Chinese economy. So any bad news about Chinese economy can affect the performance of Australian economy. These are some hard facts that you should know. Watch the above video that explains how poor Chinese economic performance has the potential to cripple Australian Dollar AUD.

In the beginning of this post we started off by saying the Australian Dollar is benefiting from European Central Bank policy of easy monetary expansion. Investors are looking for other options and that includes Aussie Dollar AUD. Now when you are trading, you should master both fundamental analysis and technical analysis. Fundamental analysis gives you the long term view while technical analysis gives you the short term view of the market. Did you take a look at our Candlestick Trading System that have very low risk? Candlestick charting was invented by Japanese rice traders some 400 years back. But surprisingly they still work in the market. So learn candlestick trading, it will help you a lot in becoming a winning trader.

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