Forex glossary
AUD/USD (the aussie)
AUD/USD states US dollars per Australian dollar. AUD is the base currency and USD the quote currency. Interest-rate expectations, commodity prices and economic conditions can affect it, without a fixed rule linking those factors to its direction.
Illustrative example
How does it work in practice?
At a hypothetical AUD/USD rate of 0.6500 USD per AUD, 2,000 AUD costs 1,300 USD before fees. A rise to 0.6600 increases that amount's USD value by 20 USD.
A case to work through
A lower rate on a short position
Model: sell 3,000 AUD at 0.6700 and buy back at 0.6680 USD/AUD, without costs.
- A short position benefits from the lower repurchase price.
- 3,000 × (0.6700 − 0.6680) gives 6 USD.
What follows? Record USD P/L before any account-currency conversion.
Example boundary: This is a linear calculation using fills, excluding financing.
A useful distinction
AUD/USD (the aussie) / USD/CAD (Loonie)
AUD/USD quotes USD per AUD; USD/CAD quotes CAD per USD.
Check your understanding
Calculate a short position’s result in quote currency.
Show the answer and explanation
+12 USD
4,000 × 0.0030 gives a 12 USD short-position gain.
Pair units and result currency
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Read the fuller explanation
Related terms
Sources and documentation
- RBA: drivers of the AUD exchange rate
Commodity-export, rate and other channels without a fixed price-reaction rule.
The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.