subject: Forex Trading Australia - Major Economic Indicators [print this page] Forex Trading Australia - Major Economic Indicators
Australia is fast becoming an internationally competitive market economy. Its Gross Domestic Product (GDP) has grown from US$642.7 billion (2005) to US$1025 billion (2009) or 1.64% of the world economy. Australia is very rich in both agricultural and mineral resources. Many consider this to be the reason for the economic success of the island nation. However, its economy is largely driven by the service sector.
Australia has weathered the recession much better than the other major economies. The nation witnessed record year-over-year growth in 2009 due to a strong banking system and successful monetary and fiscal policies. In fact, Australia's unemployment rate almost half that in US and other major European countries. Despite this, Australia has one of the largest trade deficits in the world at US$2.5 billion (2008) and there are no signs of it shrinking any time soon due to weak foreign demand and strong import demand.
Forex Trading Australia: An Overview
Australia is a major exporter of agricultural products, particularly wheat and wool, as well as minerals such as iron-ore and gold, and energy in the form of liquefied natural gas and coal. It is a major importer of machinery and transport equipment, computers and office machines, and telecommunication lasers. Its biggest trade partners are China, Japan and US.
The monetary system of the country is managed by the Reserve Bank of Australia (RBA). The goals of the bank are to ensure a low inflation economy and efficient payment systems. But often, the trade deficit comes in the way of citizen-friendly policy making. For example, in March 2008, the RBA had to increase the interest rates on its loans to 7.25% so as to be able to meet domestic demand. RBA enters the Forex whenever the market gets highly volatile or when the exchange rates show inconsistency with the economic parameters.
Australia is the third largest producer of gold in the world. Thus, its currency strengthens when commodity prices increase. Another thing to keep in mind is that Australia is a service sector dependent economy. Such services are affected time and again by the severe weather conditions. The island nation has one of the highest interest rates in the Forex market. This has led to its popularity amongst traders as an option for carry trades.
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