GBP/AUD pair development history
The pound is dated, according to some sources, about 775, according to others – 1300, and third sources believe that the concept of “sterling” appeared in the XII century. He acquired his modern form in 1971 after decimal separation.
The current pound is the fourth most traded currency in the financial market and is characterized by a significant number of daily transactions around the world.
The Australian dollar preceded the Australian pound until the 1960s. Australia, deciding to replace the old imperial system, switched to AUD. Since the country is located geographically close to the Asian continent, export and import activities between the two countries have had a strong influence on AUD.
Due to interest rates at a relatively high level, as well as correlations with global stock markets, the Australian dollar is often called the currency of risk.
After 2008, the British pound depreciated against the Australian dollar and rebounded significantly only in 2013. This opportunity appeared due to the slowdown in China’s economy and the global mining product cycle.
Factors Affecting GBP/AUD
Forex, as the largest financial market, is available 24 hours a day, but in the UK, trading begins to activate from 8:00 in the morning and decreases in activity from 5:00 in the evening.
Of course, on this day, there will be times when this currency pair will demonstrate higher volumes, but, as a rule, this happens around important market announcements. The overall performance of the British economy is an essential factor affecting the value of the pound. Three reports on the gross domestic product (GDP) are published as follows: preliminary GDP revised GDP and final GDP. Traders and investors especially monitor this information, trying to determine and predict the future movement of the market.
The monetary policy adopted by the Bank of England (BOE) also affects the price of sterling. When the Bank of England believes that inflation will grow too fast, it is proposed to use monetary policy instruments to try to control the growth of inflationary factors. At this time, the level of interest rates may increase, which is another factor that traders take into account when making decisions about trading, and a possible future direction for the GBP/AUD pair.
When trading AUD, many political and economic factors come into play.
One of the critical points that traders should pay attention to is the Australian industry of import and export activities. Over the past few decades, the price of the Australian dollar has remained at a reasonably high level due to the successful export of goods such as coal, iron ore, and others. Data on the economic situation in the country is also always useful for traders. The Reserve Bank of Australia plays a central role in determining the AUD value at a given time.
Another financial consideration to consider is the extremely low-interest rates on Australian sovereign debt.
How to trade CFDs on GBP/AUD
As an option to purchase this pair, traders can exchange pounds for Australian dollars (GBP/AUD) using a CFD contract for a particular currency pair and speculate on the price difference.
CFD is a financial tool for ensuring between the broker and the investor payments of the difference in the cost of the beginning and end of the transaction. Traders can hold a long (subject to a price increase) or a short position (provided that the price falls). This is considered a short-term investment or trade since CFDs are usually used for a limited period.
For example, to trade GBP/AUD and use CFDs, the trader reflects the direction of the underlying asset. If you think that the pound will grow, open a long position by buying CFDs. If you feel the pound will lose its value against the US dollar, you will open a short position by selling CFDs.
Thus, GBP/AUD is a reliable pair with two currencies of excellent stability. Of course, this situation can change at any time, but for the most part, these two currencies are considered reliable. Many investors seeking to diversify their portfolios prefer to trade in currency pairs, such as GBP/AUD, with the highest potential that they can offer.