What is an AUD/USD pair?

The AUD/USD pair is the abbreviated term for the Australian dollar and the US dollar, nicknamed Aussie or the Aussie dollar. Before we get into the particulars, what exactly does the term AUD/USD mean? The exchange rate tells you how many US dollars (quote currency) are required to purchase one Australian dollar (base currency).

Why is AUD a popular currency in Australia?

AUD/USD is the fourth most actively traded currency pair, representing around 7% of total forex market turnover. Its popularity is due, in part, to Australia’s political and economic stability, as well as the government’s limited interventions in the forex market. Despite this, it isn't one of the six currencies that form the US dollar index (DXY).

What factors determine the AUD/USD exchange rate?

There are two main factors that determine the AUD/USD exchange rate: The Reserve Bank of Australia and Federal Reserve control the supply of money in the market to keep the economy on track. A dovish policy, also known as expansionary policy, weakens the currency as the monetary supply increases.

What is the difference between AUDUSD spot exchange rate and forward rate?

While the AUDUSD spot exchange rate is quoted and exchanged in the same day, the AUDUSD forward rate is quoted today but for delivery and payment on a specific future date. The AUDUSD increased 0.0024 or 0.37% to 0.6606 on Monday November 27 from 0.6582 in the previous trading session.