AUD is the fifth largest traded currency in the world and holds an important position in the foreign exchange market. The AUD/USD is also one of the most actively traded currency pairs, with ample liquidity and low spreads, making it a key focus for short-term traders and medium- to long-term investors.
However, in recent years, the performance of the Australian dollar has been disappointing. From a high of 1.05 in early 2013, the AUD/USD has depreciated by over 35% in the past decade, while the US dollar index has risen by 28.35% during the same period. This reflects a global strong dollar cycle, and as a commodity currency, the Australian dollar's situation is particularly awkward.
Why has the AUD fallen into a long-term weakness?
The Fate of Commodity Currencies
The reason why the AUD is called a "commodity currency" is because the Australian economy is highly dependent on exports of bulk commodities such as iron ore, coal, and copper. While this characteristic can provide strong support when commodity prices rise, when raw material prices weaken, the AUD often becomes