Key Economic Indicator: The Australian Dollar

Macroeconomic indicators are defined as statistics that indicate the current status of the economy by determining the position or changes of different sectors in the economy for example industry, labour, market and trade.

Key Economic Indicator: The Australian Dollar
The Australian dollar is a very important economic indicator due to it being very effective in determining the strength of the economy. The Australian dollar is the currency used to purchase goods and services in Australia, however to purchase goods overseas the Australian dollar need to be converted into that currency.

The value of the Australian dollar (AUD) is compared to the currency of overseas country to determine its value for example the could be AUD compared to the United states dollar (USD) could be 0.7672 for ever AUD.
Over the past decade the value of the Australian dollar has increased greatly especially in comparison to the US dollar. It is important to maintain the value of the Australian dollar at a specific point.

The Australian dollar is a coincidental macroeconomic indicator because it is measured on a daily basis and shows a relatively accurate picture of the strength of the economy. With the Australian dollar you are able to determine the effect an event has on the economy. For example, when the GFC occurred in 2008 the value of the Australian dollar increased slightly in comparison to USD, as the United States markets crashed. However, the Australian dollar also was affected greatly. Due to America being one of Australia’s strongest trading partners.

What effects the Value of the Australian Dollar?
Lower Global Growth
When there is lower global growth the value of the Australian dollar decreases which can sometimes mean that Australian Currency can be exchanged for less of the other currency such as United States