AUDNZD

AUDNZD

AUDNZD Trading

Introduction to AUDNZD

AUDNZD is the sign for the Australian dollar and the New Zealand dollar currency pair. It corresponds to how many dollars of New Zealand (the quota currency) are required to buy from Australia (the base currency). The AUDNZD is also called Aussie/Kiwi in the forex language.
As for the currency pair itself, a day trader is looking for all the qualities it has. It is highly unpredictable. Australia is the biggest trading partner for New Zealand. The success of the economy of New Zealand and the NZD is also closely related to the economy of Australia and the AUD. Because of this very close correlation, the NZD to AUD exchange rate still is one of the most stable when compared to other currency pairs.
Oftentimes, it is the interest level that differentiates the NZD to AUD exchange rate between the two countries. They are also regarded as correlating when being in other pairs. Both economies depend heavily on the market for commodities. AUDNZD does not undergo much impact from global economic forces. Developments in local economies influence it more.
The two currencies are represented in the pair of Australian Dollars versus New Zealand Dollars. High rates of rollover and similar geographical locations cause them to trade with other currencies the same way. The group is not highly influenced by economic forces or patterns. Instead, it responds more to changes in local economies. 

About AUD

AUD is the abbreviation for the Australian dollar. It is the currency for the Commonwealth of Australia. Australia is not a particularly large country. In terms of GDP, less than one-tenth of the size of the United States. It is number 50 in terms of population and number 19 in terms of the value of its exports. It was number 13 in the world as of 2009.
However, the Australian dollar is one of the market’s five most commonly traded currencies. Interestingly, since 1983 the Aussie dollar has been only a free-floating currency.

About NZD

The New Zealand dollar (NZD) is New Zealand’s currency. NZD consists of 100 cents and is often represented by the $ or NZ$ symbol to set it apart from other dollar-based currencies. It is casually called the “Kiwi” or “Kiwi dollar” in forex trading because New Zealand is generally related to kiwi. The one-Dollar coin on the reverse depicts the indigenous bird.
The Dollar was introduced in 1967 and is divided into 100 cents. There are 10 values in total-five coins and five banknotes-with the 10-cent coin being the smallest. Previously, there were lesser denominations. It is because of inflation and costs of production, they were dropped. The New Zealand dollar is constantly one of the 10 best-traded currencies in the world. It accounts for around 2 percent of the average turnover of the global foreign exchange sector in 2013.

Technical Analysis For AUDNZD

The New Zealand dollar tends to react to changes in milk prices, as it is its largest export. Higher gold prices have led to a stronger Australian, as Australia is one of the largest producers of precious metals.
 

Fundamental Analysis For AUDNZD

Fundamental analyses are carried out on the basis of external factors that can influence the currency pair. A fundamental factor is an economic factor since economic data is used to analyze economies, to compare them with each other. It can also be a financial factor, such as the price of a particular asset or even a specific currency.

Looking at the risk appetite of these types of assets. One can hedge a little against global risk sentiment, thereby becoming more influenced by direction. The most important factors to consider when selecting the best currency pairs. It includes the direction of the market in which you are trading and the ability to predict the trade forecast. Try to pick a pair first so that there is a lot to learn and make sure that the pair is conducive to your trading timeframe, as the AUD / NZD.

If a beginner is trading too many currency pairs at the same time, we advise him to focus and learn one aspect of the Forex. Focusing on one or two instruments at most will give you much better results. It gradually expands as you feel more comfortable and confident as a trader. A good understanding of the fundamentals will help you understand trading with Forex over the long term.Read More

What are Beginner’s Tips for Trading AUDNZD

1.      The “base currency” is the first currency of the pair (AUD) and the second (NZD) is the “quote currency.”
2.      There are basically two ways that any pair of currencies can move higher or lower: i. The base currency will weaken or strengthen. ii. The currency of quotes can strengthen or weaken.
3.      As the forex market never sleeps and thus currency prices are constantly changing. There is a continuous state of flux in both the base currency and the quotation currency.
4.      The AUDNZD would increase if the AUD (base currency) were to strengthen while the NZD remained static. Conversely, the pair would collapse if the AUD deteriorated, all else being equal.
5.      The AUDNZD would decline if, on the other hand, the NZD (the quote currency) were to increase. And if the NZD weakens, the currency pair would rally against its NZD dollar pairing as the AUD would gain relative strength.
6.      The speed of each transfer depends on the two-currency relationship. For example, the move will be more pronounced if one is strengthening while the other is weakening than if only one currency is on the move.
7.      There are very little sideways drifts in the currency pair, and due to a lower trading volume. You can most often clearly identify them as consolidation times. At the same time, trading two risk-on currencies make the trading strategy more stable. The higher the percentage level, the greater the exchange risk for the particular uncertainty and time period.
8.      Also, it is important to remember that there is always a change in the relationship between the base and quote currency. So just because in the current session, the AUDNZD is rallying doesn’t mean it will be tomorrow or even one hour from now.
9.      Both currencies are matched together in the forex market. So you are both buying and selling when you’re ready to place a trade. For instance, if you sell the AUDNZD (also called going “short”), you sell the Australian dollar at the same time and buy the New Zealand dollar. On the other side, if you buy the AUDNZD (also known as going “long”), you buy the AUD and sell the NZD.
10.  Trading with a pending/limit order instead of market orders is another easy way to minimize prices. The fact is that it nullifies the slippage on the contract. And this, in turn, will also reduce total trade costs.

What makes the AUDNZD currency pair signal?

1. Both currencies are seen as commodity currencies. This is based on exports of agricultural products and raw materials, with a substantial portion of their economies. New Zealand, however, has had a growing reliance on tourism, which may contribute to some variance in the currency outlook.
2. In general, international economic factors are borne by both due to the vast volume of trade between the two countries. China is the main trading partner in Australia, and their issues will usually spill over to New Zealand. It results in the transfer of the two currencies in tandem.
3. During the Asian session, the pair have more volatility and tends to be popular among traders who prefer dealing with less volatility. Similarities between the countries cause the pair to respond more to technical than fundamental.
4. Be sure to check out the economic calendar as well as the trading tips. It will help you get the most out of your trading, to keep track of the major events that might affect this currency pair.

Characteristics of the AUDNZD pair

1. Given the relative scale of the two economies, this pair is quite liquid and very common. The Australian economy is ranked in the world’s top twenty biggest economies, with $1. 32T of GDP in 2017. This reduces the GDP for that year at $205. 9b for New Zealand. Both countries are among the world’s richest, with significant export dependency.
2. The currencies are fairly newcomers to the forex world. To establish a good reputation for financial stability, openness and being pro-business. They have gone through great pains. The two countries have a close relationship, sharing a similar culture, history and trade outlook.
3. Australia is the largest trading partner in New Zealand. As such, the two currencies often move in sync. Between the two countries, currency pair fluctuations respond more to minor differences. Both countries tend to maintain high interest rates, making them prime carry trade objects. Therefore, currencies will fluctuate independently due to capital flows in other pairs. They will remain largely stable between each other.
4. Both currencies are known as risk-on currencies. The pair lets you escape events where the plan you developed on the strategic research is blown up by a major economic or political case.
5. The early time zone is one last but not least aspect of the Aussie/Kiwi pair. The news that may influence your plan comes very early in the process whether you are exchanging daily candlesticks from Asia. Also others like America, Africa, or even the Middle East.

AUDNZD trade volume and statistics

Traders integrate a much wider range of economic data and move prices daily. Investors can change stocks above or below the value that their fundamentals suggest. Australia has some of the highest interest rates in the developed world, but it also suffers from its own national housing bubble. Instead, it has a very low inflation rate of 2.5% and a relatively high unemployment rate (6. 7%).
Despite the many striking features, the foreign exchange (Forex) market is vast, complex, and very competitive. Banks, trading houses, and funds rule the market and quickly include new information into the price. It is impossible for a currency trader to know what he is trading at a given time. To trade foreign currencies on a fundamental basis, a trader must have knowledge of all seven major currencies.

Spreads, volatility and correlations of AUDNZD

You can see that there is a very short sideways pair that is drifting downwards, but the market is undecided. The sideways trend is an obvious consolidation, so it is even more difficult to implement a trading strategy effectively. In this timeframe, it is very difficult to make money from trading.
Correlation can be a measure of the relationship between a currency pair and its market value over a given period of time, such as a month or a year.
It is common to find currency pairs that are most heavily traded with the New Zealand dollar and the US dollar, such as AUD / NZD and US dollar / USD. At different seasons, currency correlations show that two currency pairs can move in the same direction over a certain period of time.
Before deciding to try out a correlation trading strategy, we need to be aware of that over time. There can be significant fluctuations in the relationship between a currency pair and its assets. Currency pairs and assets that may be strongly correlated in one year and have a negative correlation the following year. We should also be aware of times when the correlation between assets is strong or weak and that relationship is shifting.
Understanding correlations enable us to hedge and diversify our exposure to foreign exchange markets. If we have a trend-setting bias toward a particular currency, we can spread our risk by using two very positive correlated pairs.
For example, if we start a long buy of AUDNZD and it starts to move in an unfavorable direction. We could hedge our position by buying a currency pair that has a negative correlation to AUDNZD.
We can develop a trading strategy that works best when volume is low and spreads are high, and vice versa.
In low-spread trading, the ideal scenario is one in which volatility is high, while spreads are low. Also, high volatility can be offset by wider spreads. Take an example: in the summer of 2014, the volatility index rose as trend traders landed short-term trend gains.

Volatility of the AUDNZD

The volatility of this pair is quite strong since the two currencies although they don’t correlate much in the same region. The two economies are perceived to be more like rivals from which big institutional investors can choose.

FAQ's

The scale of New Zealand’s economy is relative to Australia’s, along with the volume the NZD is priced on foreign exchanges. It ensures that the AUD is usually marginally stronger than the kiwi dollar. 

Posts Tagged With AUDNZD