As a foreign exchange Melbourne trader it is essential that you are aware of the factors that affect your currency pairs. Many traders only look to the major currencies and often ignore the other currencies. If you feel that with your experience and knowledge you could venture beyond the majors, there are a couple of tradable currencies you should look into. The information below provides you with the basics related to these currencies, such as the central banks involved and trading pips.
The Aussie Dollar
The Reserve Bank of Australia offers high interest rates and has always been targeted at upholding the economic strength of the country and price stability. The bank is headed by the governor, with the aid of a deputy governor, a Treasury secretary and six other members. Their inflation target is between two and three percent and they aim to meet at least nine times during the fiscal year.
The Australian dollar, along with the New Zealand dollar, is always a carry favourite for many foreign exchange traders. It offers the highest yields when compared to other major currencies. It can promote volatility in cases of deleveraging. Under normal trends, the currencies usually trade around 30 to 40 pips which are similar to the other majors. Both these currencies are linked to commodities such as silver and gold.
Foreign Exchange Melbourne Traders and the South African Rand
The South African Reserve Bank is the monetary authority in South Africa. It takes on similar responsibilities to all other central banks regarding the monetary policy of the country. The SARB is sometimes seen as a creditor in certain cases, a major gold custodian and a clearing bank. Its main function is to achieve and maintain price stability. This function includes intervention in the forex market, if the need arises.
The SA Reserve Bank is a wholly owned private entity. It has in excess of 600 shareholders who are regulated as they cannot own more than 1% of the total quantity of outstanding shares. This ensures that the economic interests are placed above private interests. To ensure the maintenance of this policy, there is a governor and a 14-member board who are responsible for the activities of the bank and who work toward the country’s monetary goals. The board is required to attend six meetings on an annual basis.
This currency is seen as an emerging opportunity for traders and is quite volatile. The daily average can go as high as 1000 pips. This should not deter you because when you translate this into dollar pips, the movements can be equated to the average day for the British pound. This makes the SA Rand a great alternative to trade with the US dollar, particularly when you consider the carry potential. You should also bear in mind the link the currency has to platinum and gold. The South African economy is considered to be a world leader in exports of both these metals and a correlation can be drawn when compared to the Canadian dollar and crude oil. If you find that you are unable to access sufficient economic data related to this currency, you should turn to the commodities market to view the state of the South African economy.