Australian Dollar in Forex Market - The Aussie

The Australian dollar (AUD) is considered to be a major currency in the Forex market. It is also one of the “commodity” currencies because of the Australian economy’s dependence on commodity exports.

Australia is the world’s seventeenth largest economy.

Does Your Economy Run a Trade Surplus or a Trade Deficit?

Australia runs a trade deficit of $35.23 billion, giving the country a ranking of 182 out of the 190 countries tracked by the CIA in The World Factbook.

What Does Your Economy Export?

Australia exports coal, iron ore, gold, meat, wool, alumina, wheat, machinery, and transport equipment.

According to the World Trade Organization (WTO), Australia exports $154.2 billion in goods and merchandise compared to only $41.2 billion in commercial services. The WTO breaks down those exports as follows:

Goods and Merchandise

Agricultural products: 15.2 percent
Fuels and mining products: 56.8 percent
Manufactures: 14.9 percent

Commercial Services

Transportation: 12.5 percent
Travel: 62.8 percent
Other commercial services: 24.6 percent

To Whom Does Your Economy Export?

The WTO ranks the following countries as the top destinations for exports from Australia:

China: 21.6 percent
Japan: 19.5 percent
European Union: 8.7 percent
South Korea: 8.0 percent
India: 7.4 percent

What Does Your Economy Import?

Australia imports machinery and transport equipment, computers and office machines, telecommunication equipment and parts, crude oil, and petroleum products.

According to the WTO, the country imports $165.5 billion in goods and merchandise compared to only $41.4 billion in commercial services. The WTO breaks down those imports as follows:

Goods and Merchandise

Agricultural products: 6.2 percent
Fuels and mining products: 13.9 percent
Manufactures: 72.2 percent

Commercial Services

Transportation: 25.3 percent
Travel: 44.1 percent
Other commercial services: 30.6 percent

From Whom Does Your Economy Import?

The WTO ranks the following countries as the top sources of imports to Australia:

European Union: 19.7 percent
China: 17.8 percent
United States: 11.3 percent
Japan: 8.3 percent
Thailand: 5.8 percent

Do You Have an Attractive Government Debt Market?

Australia currently has a Moody’s rating of Aaa. It received this latest rating on October 20, 2002. This most recent rating was an upgrade from the Aa2 rating that the country had held previously. This is a positive sign for the country’s government debt market.

Do You Have an Attractive Equities Market?

Australia has an attractive equities market. It is the thirteenth largest equities market in the world, with a total market value of $1.258 trillion.

Tell Me About Your Central Bank. What Are Its Mandates?

The Reserve Bank of Australia’s (RBA) obligations with respect to monetary policy are laid out in Sections 10(2) and 11(1) of the Reserve Bank Act of 1959. Section 10(2) of the act, which is often referred to as the bank’s “charter,” says: “It is the duty of the Reserve Bank Board, within the limits of its powers, to ensure that the monetary and banking policy of the Bank is directed to the greatest advantage of the people of Australia and that the powers of the Bank . . . are exercised in such a manner as, in the opinion of the Reserve Bank Board, will best contribute to: