What is AUD/USD?

AUD/USD represents how many U.S. dollars one Australian dollar can buy. If AUD/USD = 0.65, one AUD equals 65 U.S. cents. The first currency (AUD) is the base currency, and the second (USD) is the quote currency.

How Forex Prices Move

Exchange rates rise and fall based on global trade supply and demand. When the AUD strengthens, AUD/USD rises (e.g. 0.65 → 0.70). When it weakens, the rate falls (0.65 → 0.60). Key influences include interest rates, commodity prices, and global risk sentiment.

Reading a Forex Quote

Example: AUD/USD = 0.6523 / 0.6526

The first number (Bid) is the price traders can sell at. The second (Ask) is the price to buy at. The difference between them is the spread, often just a few pips wide.

Pip and Lot Size

A pip measures small changes in price (0.0001 for most pairs). A lot defines trade size — 100,000 units (standard), 10,000 (mini), 1,000 (micro). If AUD/USD moves from 0.6500 to 0.6510, that’s a 10-pip rise.

What Moves the AUD/USD?

The AUD is heavily tied to commodity exports such as iron ore and gold, while the USD reacts to U.S. economic data and Federal Reserve policy. Example: strong Chinese demand can lift AUD; rising U.S. interest rates can strengthen USD.

Risk Management in Forex

Forex trading uses leverage, amplifying both profits and losses. Always use stop-loss and take-profit levels. Example: With 20:1 leverage, a small move can significantly impact your balance. Protect your capital first and never risk more than you can afford to lose.

Summary

You’ve learned how to read a Forex quote, measure pips, calculate trade size, and understand key influences on AUD/USD. The next step is to practice with a demo account before moving to live trades.