The AUD/JPY, the ‘Aussie-Yen’, is considered to be a cross pair because it does not contain one of the three major reserve currencies. Similar to other JPY currency pairs, like the GBP/JPY and USD/JPY, the AUD/JPY is often associated with the carry trade - where traders borrow low-interest rate currencies and invest in those with a significantly higher interest rate. However, the carry trade tends to fall off during global liquidity shortages which can lead to a marked appreciation in the value of the JPY.
The AUD/NZD tends to be primarily influenced by the local economies of Australasia and is not heavily affected by risk-trends or global factors. The primary influence on the NZD is agricultural food and milk markets, whilst the AUD is influenced by commodity markets.
The Canadian dollar is the seventh most-traded currency in the world, whilst the Great British pound is the third most popular reserve currency whilst forming part of the International Monetary Fund’s (IMF) Special Drawing Rights (XDR or SDR). Both currencies are referred to as ‘majors’ of the forex markets. The GBP is considered a safe haven currency in times of significant market risk as a result of the pounds long-term stability In comparison, the Canadian dollar is heavily influenced by the price of oil and is often referred to as a petrol currency, or more commonly, as a commodity dollar currency.
Political stability and economic performance are two key pressures on the EUR, resulting in the European Central Bank (ECB) interest rate changes causing heavy fluctuations within the value of the euro. In comparison, the AUD has had a less turbulent time recently and has particularly benefited from what has been a prominent export market for industrial metals, in the form of the Asia-Pacific region, especially China.