Taking advantage of fundamentals to trade aussie-dollar


What just happened there? I’m asking a rhetoric question.

I think that the Governor of the Reserve Bank of Australia gave a very bleak image of the Australian economy. Although he tried speaking in a positive tone, it didn’t help much. But come on! He said that the high inflation rates have continued affecting interest rates. The country is struggling to reduce them to between 2 and 3 rates. He also said that the under employment is affecting wages. Who pays university graduates in wages! Phew! He further said that the close of borders is preventing migrant labor, which is a force in driving cheap labor that boosts economies. His speech was very bleak. And so was the US news about falling stocks, bonds, etc.

I traded the AUD/USD pair yesterday and today on M15 chart. It has been constantly long with a few areas of very brief retracements if one choses to go bullish. It’s like free money.
It’s everything sentimental, fundamental and technical in one dung basket.

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Hi @Mupo, As an Australian, I’ll try and put some context around the rhetorical question…

For the last 12 months I have been trading the currency strengths in line with this pandemic, almost by sentiment, almost by fundamentals. Mid 2020, the Aussie and Kiwi were strong as our region had not been devastated by COVID to the same degree as Europe and the States…

I pointed this observation out on Dennis’s thread possibly 12 months ago and have continued to trade the anomaly with great success. Even today lets have a look at the strength of the respective currencies…

The US is continuing to open up their economy. They are moving toward the policy of live with the Virus and most States have given up an their lockdown and eradicate philosophy… Hence the USD as been strong for quite a few weeks now… At the other end of the CSW Spectrum is the AUD and NZD. Both these nations have resorted to an eradication strategy to defeat COVID… Until recently this has been very successful and over the past 12 - 18 months the AUD/NZD has surged against the USD.

Now Australia (NSW) appears to have an unstoppable outbreak of the Delta Variant of COVID hence the AUD is in decline against a more settled USD. It’s a similar situation with the GBP… As the Virus ravaged the UK the GBP has displayed almost barometer characteristics against other currencies, mainly the USD.

Now the UK (and possibly Australia) appear to be adopting the live with the Virus strategy and open up their borders and economies to the greater globe… both currencies have weakened noticeably since noises about the change in ideology of handling COVID began to resonate. This is a step into the great unknown, a leap of faith for any Countries that are moving in this direction.

It’s the Governor of the RBA’s job to appear balanced and calm no matter what the situation so you will never get any emotional speeches from this particular office. Australian Interest rates are at record lows at 0.01%. The only reason Australia didn’t go to a negative rate was the Government failed in it’s bid to kill off cash… A necessity for 0% rates to have any real effect.

Australia isn’t suffering from true inflation… We import nearly all of our hard goods from Asia and abroad and with the current shipping and economic damage caused by the pandemic across our trade regions, we are experiencing price spikes or short supply along many of these supply chains.

The RBA announcement included the forecast that the Interest rate will not face upward pressure until at least 2024…

Low unemployment has been a surprise to everyone (including Government) due the huge amount of business failures in the last 18 months due to harsh lockdowns, closed borders and nil tourism… One of our biggest employers…

The pandemic has generated a big change in Australian society with many now able to decentralise and work from home… People are fleeing the cities for regional centres or moving to better climates in the North of the Country.

Australia’s second largest city, Melbourne has had a population decrease of nearly 80k people in the last 18 months… The first time since the early 2000’s this figure has been negative.

My opinion is that many Australian’s and not just the young, have realised that building for the future has become a dangerous dream when situations like the GFC or COVID can tear it all down and leave you derelict. I have seen a similar sentiment in other parts of the globe, even a few here on BP that this Pandemic has changed the paths of many, many people.

Live for today is now the stronger currency against plan, save and build for tomorrow…


Hey! First and foremost, I’m sorry to hear about the Covid-19: Delta and its destructive impact on the lives of majority Australians, and the rest of the world. No words can really express my heart felt concern.

Second, thank you very much for sharing about the Australian economic story in the face of COVID-19. I have lots of friends in Australia in diverse professions. Yet, none of them ever explained this situation the way you did. Probably because I never asked them from a trading point of view. Thanks for sharing more indepth light on this situation. I feel the urge now to call my very close relations just to check on them. I hope that they are doing well healthwise, and economically.

Please stay safe!

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