Reserve Bank of Australia

Description

Any forex broker or trader who deals with the Australian Dollar will want to pay special attention to policies and announcements coming from the Reserve Bank of Australia (RBA) and its Reserve Bank Board. The RBA concerns itself mainly with monetary policy and strives to achieve, low, stable inflation over the medium term.

The RBA was founded in 1911 but refocused its efforts away from commercial banking and toward regulation in 1960.

Currently, the RBA is responsible for the management of the Australian Dollar (AUD), one of the 6 majors highly dealt in FX trading. Increasing and decreasing the money supply is at the RBA’s discretion. Primary traders can also buy and sell treasury bonds from the RBA, which helps to raise money for government operation, to pump money into the economy, or to remove excess cash during critical times.

Australia’s nationwide interest rates are also regulated by the RBA, and individual commercial banks are subject to asset holdings adjustments from them as well.

Forex Trading Importance

Trade balances are always a main concern for individuals involved with forex trading. Since trade balance depends heavily on a country’s currency supply, the RBA’s decisions to increase or decrease the amount of available currency will directly affect the AUD’s exchange rate and performance across forex trading platforms. The RBA’s decisions concerning nationwide interest rates will also be of special interest to forex brokers and traders alike.

For more info on basic economic indicators commonly paid attention to in forex trading, browse our additional resource pages.

Forex Trading Importance

Anyone paying attention to the actions of the Reserve Bank of Australia as an FX trading indicator will likely want to keep up with other central banks from countries that also have currencies of interest. Examples include the nearby Reserve Bank of New Zealand, the European Central Bank or the United States Fed.

For more info on basic economic indicators commonly paid attention to in forex trading, browse our additional resource pages.