Ever wondered what is the Forex exchange rate at the moment? It has to be one of the most important questions you will ever have answered. If you don’t know what the exchange rate is, you can’t trade with your money. You can’t use your savings or invest it in the stock market, etc. This is the reason why so many people are not making any money and are living pay check to pay check.
So what is going on with the exchange rate? Why is it that South Africa has a higher exchange rate than almost any other country in the world? Well, there are a lot of factors that are involved. It just depends on who is telling the story.
First of all, South Africa has a very high inflation rate – about 25% per year. This means that the prices of South African goods go up every year. But do note that this inflation was calculated based on the price of basic commodities like coffee, cocoa, iron, coal, timber, etc. So if you go by this definition, then obviously, things are not as bad as they seem.
However, when you also consider the cost of living, which is rising faster than inflation, then things get really bad. So who does not feel that the cost of living is getting out of control? And this is where people like you come in. So if the rand is weak, and the cost of living is going through the roof, surely you would look at an alternative currency – the rand should go up against the dollar.
Now do note that although this is possible, you would not want to do this at the first sign of a rise in the dollar. You will end up with problems at the soonest time, if you trade with the currencies of the country with whom you have a trade agreement. This is not always possible. Remember the scenario in the movie, “Lucky Number Slevin”? Well, what do you know – it’s a ninety percent chance of your currency being exchanged against that of the US dollar at some point during the exchange process.
In addition to this, there are other reasons as well why you should consider other than the US dollar when trading. Take for instance, the Australian Dollar. It is said to be the strongest currency in the world, and it is said to be strongly connected to the Australian stock market. With all these facts, would you not see the potential in trading the Aussie dollar against the US dollar? This is exactly what a smart investor does.
Moreover, there are many more factors for you to consider. The most important of these is probably oil prices. If oil prices go up, so does the value of the Australian dollar. Conversely, if oil prices go down, then the value of the Australian dollar goes down. The point here is that if there is a trend like this in the global economy, then you can take advantage of it by investing in the currencies of countries which have higher commodity prices – like Australia.
You should now see why investing in the Australian Dollar when trading the Forex market is a wise move. Now go out there and start researching on these exchange rate patterns yourself. Do not be left behind by others who may be using these techniques to make good profits. It’s time that you get involved with the big boys and start making some serious money yourself. The Forex market is truly one of the most interesting things around; and its exchange rate patterns are the perfect clues as to why.