The base currency (AUD) stands for the Australian dollar, which is also known as the Aussie dollar or Aussie. The AUD replaced the Australian pound in 1966. In 2016, the currency was in circulation for 50 years. However, the Australian dollar is the official currency in Australia and several independent countries and regions of the South Pacific, such as Papua New Guinea, Christmas Island, Cocos Islands, Nauru, Tuvalu and Norfolk Island.
The Australian dollar was approved as a free-floating currency in 1983. However, the reason for its popularity among traders could be related to several factors related to geology, geography and government policy. It is also worth mentioning that Australia is one of the richest countries in the world in terms of natural resources, including metals, coal, diamonds, meat and wool.
On the other hand, the Indian Rupee (quoted currency) is the Indian national currency, also known as the INR. However, INR is usually represented by the symbol ₹. The Indian Rupee (INR) is named after the rupee, a silver coin first issued by Sultan Sher Shah Suri in the 16th century. For now, currency issuance is managed by the Reserve Bank of India. Currency management in India could be considered as one of the most important tasks of the Indian Reserve Bank. Moreover, the Indian Reserve Bank also plays an important role in the Indian Government’s Development Strategy, issuing statements and deciding on interest rates in the country.
From a historical point of view, the new rupee sign (₹) was officially approved in 2010. It was invented by D. Udaya Kumar, and is derived from a combination of the consonant Devanagari “र” (ra) and the Latin capital letter “R” without its vertical bar (similar to R rotunda). The first series of coins with the new rupee sign began on July 8, 2011. Prior to that, India used “₨” and “Re” as symbols for multiple rupees and one rupee.
As I talk about coins, I remind you that Indian coins are issued in denominations of 50 paise, one rupee, two rupees, five rupees and ten rupees. So the defeat is 1/100 of a rupee. Coins worth 50 paise are called small coins, while coins equal to or larger than one rupee are known as rupee coins.
On the front, banknotes, paper currency or banknotes in India are issued in denominations of 5, 10, 20, 50, 100, 500 and 2000 rupees. It is worth mentioning that the denominations are printed in 15 languages on the back of paper rupees. On the front, the denominations are printed in Hindi and English.
Usually, Indian banknotes are updated with new designs, including distinct differences from the old Mahatma Gandhi banknotes to the new banknotes of the same name. The notes depict various themes of rich Indian culture.
What is AUD / INR (Australian Dollar / Indian Rupee)?
One currency is always quoted against another because currencies are traded in pairs. Thus, the AUD / INR currency pair represents trading in the Australian dollar against the Indian rupee. In this case, the first currency (AUD) is the base currency and the second (INR) is the price currency.
The main factors affecting the AUD / INR currency pair
The value of the AUD / INR currency pair is largely influenced by geopolitical and global sentiments, such as many currencies in emerging markets. As foreign players withdrew from the Indian stock market, which contributed to the fall of the Indian rupee. Across the pond, the INR currency has a strong correlation with crude oil prices as WTI crude oil makes up a significant part of India’s total imports. Thus, rising crude oil prices are hurting the economy. If WTI crude oil prices continue, it will not only affect the stability of the rupee and growth in stocks, but may also produce an inflationary effect.
The value of the Australian dollar (AUD) currency is mainly affected by several factors such as interest rate differences, commodity prices, purchasing power parity, government credit ratings and sentiment and speculation.
AUD / INR
Historical data table:
AUD / INR Historical price data
Factors affecting AUD / INR prices:
The value of the INR depends on key factors affecting the economy such as imports and exports, employment, inflation, interest rates, trade deficit, growth rate, stock market performance, foreign exchange reserves, foreign investment inflows, macroeconomic policy, banking capital, commodity prices and geopolitical conditions.
It is worth mentioning that income levels widely influence INR currencies through consumer spending. When incomes grow, people spend more. However, higher demand for imported goods tends to increase demand for foreign currencies and thus undermines domestic currency.
As already mentioned, higher interest rates in the economy attract foreign investment, increasing the demand and value of the domestic currency. Likewise, lower interest rates tend to undermine the exchange rate. By raising interest rates, the central bank can reduce demand for such goods, leading to price pressures.
Likewise, the RBI controls the value of the Indian rupee with various tools, including controlling its supply in the market and, thus, making it cheap or expensive.
Let me talk about some ways in which the RBI controls the movement of the Indian rupee, the first would be (change in interest rates), then relaxing or tightening the rules for fund flows, adjusting the cash reserve ratio (the share of money) banks have to keep with the central bank) and selling or buying dollars on the open market, ”says Brahmbhatt of Alpari.
Across the pond, one of the main drivers of changes in AUD values is the difference in interest rates. The difference in interest rates is the relative benefit that an investor realizes by investing in the assets of one country in relation to another. If interest rates in Australia are 1.50% but are in the US more than 2.40%, then the investor will get a high return by buying US property. But this method seeks to undermine the value of AUD, as investors sell AUD and buy U.S. dollars to invest in U.S. assets.
WTI crude oil prices could also be considered as one of the main factors affecting Indian rupee (INR) prices as crude oil makes up a significant part of India’s total imports. Thus, rising crude oil prices are hurting the economy. If WTI crude oil prices continue, it will not only affect rupee stability and stock growth, but may also produce an inflationary effect.
Economic data such as consumer price index (CPI), gross domestic product (GDP), trade balance, retail sales, labor force surveys, consumer price index and industrial price index have a major impact on USD / INR prices. These data are important for understanding the stock market, and in particular the direction of the INR.
International trade and the movement of people is growing rapidly, no currency is acceptable worldwide. Whether you go to higher education in the United States or fly to Rio for vacation, services and goods you will have to pay in their currency. In addition, when paying through an online store from international stores, you must pay in foreign currency.
Thus, the exchange rate for currency conversion depends on the market scenario and the exchange rate followed by the banks in the country. A floating exchange rate or flexible exchange rate is determined by market forces without the active intervention of central governments. For example, due to large imports, the rupee supply may increase and the value fall. Conversely, when exports rise and dollar inflows are high, ten rupees will be supported.
Sentiment and speculation:
The Australian dollar is considered one of the most popular proxies of growth and risk in global financial markets, commonly used as a barometer and trading device, to benefit from short-term changes in the perception of market risk of global economic growth. Therefore, when there is a bullish bias in the market, the Australian dollar will often climb, conversely, if pessimism prevails, the AUD will often fall.