Despite a falling GDP the Australian dollar has remained relatively strong in recent weeks, this leaves many traders on the forex currency exchange scratching their heads wondering what givesand when it will give. Much of Australia's current well being is dependent on China's wellbeing since the two countries and their economies are intertwined. However recent moves by China to curb inflation may serve to hurt Australia in the long run and of course the AUD as well.
The world's continuing and ever-increasing appetite for gold has also helped to lift Australia's due to it being the world's third largest producer. Indeed as demand for the precious metal increases interest in Australia will probably increase as well. Due to the correction in the works for the AUD due to China's inevitable financial moves the AUD should be approached bearing this in mind.
Australia's central bank is taking a dovish outlook on Australia's current position and has begun buckling down on any additional spending for the near future. Long position trading of the AUD is a great idea as a result when paired with the EUR due to the inevitable corrections sure to take place soon. The Australian dollar being so closely linked to China should cause traders to take note of the current upheaval in Korea. If China becomes involved in the current Korean conflict it could signal trouble for Chinese currency if China sides with North Korea and Japan sides with South Korea. Ultimately this scenario is unlikely but to an extent it is indeed possible.