Australian Dollar / US Dollar - AUD/USD

The Australian Dollar (AUD) left its indexation on Pound Sterling a year after its creation, in 1967. That same year, when the Pound Sterling was de-valued against the American Dollar (USD), the Australian Dollar didn’t have the same movement and maintained its indexation on the American Dollar (indexation that had just been decided) to 1 AUD = 1.12 USD.

The superior value of the AUD/USD cross was reached (about 1 AUD = 1.5 USD) in the years following years (1974), the Australian Dollar apprised a lot against the American Dollar, but the Australian Dollar only really entered the great worldwide currencies’ floating exchange rate regime in 1983.

It is only from this moment when the AUD/USD cross (also nicknamed “Aussie” following the example of the Australian currency) was negotiated in important volumes on the foreign exchange market (Forex).

From a beginning « higher point »reached in March 1984 at 0.96 (1 AUD = 0.96 USD), the Australian Dollar kept recording (except the depreciation period of the American Dollar following the Plaza Agreements of 1985) weak decreases against the USD, weak regular decreases that led to a parity divided by two, fifteen years later : AUD/CAD = 0.47 in April 2001.

Since then, the Australian Dollar began an important rise, favored by the combined effects of the increase of the raw material prices ( Australia is a very important  exporter) and the high interest rate policy run by the Reserve Bank of Australia (7.25% in March 2008), rise of the Australian Dollar that went on until July 2008 (AUD/USD = 0.98).

The collapse of the raw material rates since mid-2008 have had no responsibility in the re-apprising of the American Dollar observed since then (AUD/CAD = 0.70 in April 2009), a re-apprising surely reduced by Australian interest rates (3% in April 2009) maintained to a far higher level than the American rates.

Structurally, the AUD/USD depends as well on the raw material rates as the Australian interest rates that encourage investors to buy AUD with the aim to invest them with better rates (so called “carry-trade” operations).