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The Aussie Dollar: The Price Rise Nobody Is Expecting

April 11, 2019
BY Emma Richards

One commonly overlooked aspect of fundamental analysis is that many other traders might be reading and acting on the same reports at almost the same time. Within minutes of a new economic release going global, trading volumes can spike and prices react instantly. Traders slightly late to the party find only the already cold leftovers of fading price action. Obviously, the most profitable ‘Buy’ trade would be from a low priced currency pair before an unexpected rise. Is the Aussie dollar going to be the next surprise?

The Aussie dollar right now

Buy when low, sell when high.

The Australian dollar has been in a downturn since the big reversal of January, 2018. Starting with a rapid two-week crash, prices eventually fell from $0.81179 to just $0.69977. Q1 of 2019 didn’t see any major movements, and AUD continues to dance slightly above the low. Q2 is here, but there are no obvious signs of recovery… yet!

There’s a lot of speculation around why the downward trend has lasted so long, but none have been accepted by the main market analysts. Some say the Aussie dollar lacks interest rate support. But this weakness alone is probably not enough to prolong such low prices. AUD is far from showing up on the radar of hot market movers right now, but it may have a few surprises up its sleeve for the rest of 2019.

Speculation for Q2

Whenever China causes speculation, Australia feels the effects.

Deputy Governor Guy Debelle of the Reserve Bank of Australia will soon announce details on the economic status of Australia, and he’s keeping the details of that announcement close to his chest. In general, Australia hasn’t released any positive news for over a year, so AUD traders are hoping for something significant in 2019… and they might be getting exactly that.

Australia’s economy shares a strong connection with China. This is known by most traders, but how to use that knowledge? Currently, expectations that China and the US will settle on a lasting agreement are on the rise, which would likely fuel China’s currency prices.

US President Donald Trump also fueled those hopes, suggesting that he will make a historic announcement within the next few weeks. Just what this monumental announcement will be has political analysts speechless for now, but Asian market traders are speculating something big that could spill over and ignite a long overdue AUD price rise.

What to watch for

When it comes to forex, there’s more behind the price moves than just economy. Traders are now realising that the media can drive global sentiment. Just how the media presents the news makes all the difference, so be sensitive to the overall tone. If everyone cries “Buy!” at the same time, an upward move usually follows.

Keep your eyes on the AUD price charts and your ears open to hear which direction the news outlets of the world are taking. If the Aussie dollar is really going to rise, it will probably be preceded by a reoccurring positive theme on practically every financial news outlet in the world.

Trading the Aussie dollar

Put yourself in a position to start acting on opportunities. Make sure Exness can approve your signup as soon as possible so you can act quickly. You might not want to trade every day, but when there’s smoke, there’s usually fire. Trading a hot currency on the rise is always best when you catch the move early.

Find time to get familiar with the currency market, political influences, and how the media distributes information. Test your theories thoroughly with the Exness demo account. Try targeting currency pairs that are in the eye of the world media. Develop your skills and instincts risk-free, only then should you consider investing. With Exness, making the move to real money trades can be done with just a few clicks.

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Disclaimer: the publication of analysis is a marketing communication and does not constitute investment advice or research. Its content represents the general views of our experts and does not consider individual readers’ personal circumstances, investment experience or current financial situation. Analysis is not prepared in accordance with legal requirements promoting independent investment research and Exness is not subject to any prohibition on dealing before the release of analytics. Readers should consider the possibility that they might incur losses. Exness is not liable for any losses incurred due to the use of analysis. Risk warning: CFDs are leveraged products. Trading them carries a high level of risk, so it is not appropriate for all investors. The value of investments can both increase and decrease and an investor may lose all their invested capital. Under no circumstances shall the Company have any liability to any person or entity for any loss or damage in whole or part caused by, resulting from or relating to any transactions in CFDs. © 2008—2019, Exness
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