The AUD/USD, the ‘Aussie-Dollar’, is primarily a commodity currency pair. The AUD/USD is heavily affected by world economic factors. The Australian dollar can, and often does, see pronounced swings in price due to the underlying demand for iron ore, whilst the US dollar is more dependent on domestic jobs data and the price of light sweet crude oil. For this reason, the interest rate differential between the Reserve Bank of Australia (RBA) and the Federal Reserve (Fed) can have a significant impact on the AUD/USD.
Known as the ‘Gopher’, the USDJPY is one of the seven major traded currency pairs. Research suggests the USD/JPY could account for 17 percent of the total daily volume within the forex markets making it the third highest traded currency pair. The USD/JPY reacts heavily to economic news and events having a greater tendency to sustain a trend created by economic data than other currency pairs. With both having substantial manufacturing bases, manufacturing and industrial data can affect this pair quite heavily.
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.