![\"\"](\"https:\/\/www.forexmentorpro.com\/members-area\/wp-content\/uploads\/2020\/02\/australia-map-300x199.png\" "\\"\\"")
Before the 1960\u2019s, Australia\u2019s major trading partners were the United States and Britain.<\/p>\n
However, the focus has shifted to Asia, with four out of five of the top trading partners located there.<\/p>\n
Today Australia\u2019s major trade partners are<\/strong><\/em>\u00a0China, Japan, the U.S., and the Republic of Korea. Australia has embraced trade liberalism and partakes in numerous global trade agreements. [1]<\/p>\n Mineral Production<\/strong><\/p>\n Australia produces 19 major minerals, from over 350 mines. They are one of the world\u2019s leading producers of bauxite (aluminum), iron, lithium, gold, lead, diamond, rare earth elements, uranium, and zinc amongst others [2].<\/p>\n Some of the concerns are that Australia is merely a quarrying nation with low levels of processing, the mining can cause ecological issues, consumption of coal accounts for a major portion of the greenhouse effects, and mining is unsustainable as the resources are not renewable [3].<\/p>\n Australia: Top exports and imports<\/strong><\/p>\n The top exports for Australia are iron, coal, gold, petroleum gas, gems, meat, pharmaceuticals, machinery, medical apparatus, and wheat.<\/p>\n Their top imports are cars, refined petroleum, special purpose ships, broadcasting equipment, and delivery trucks.<\/p>\n Its top export destinations are China, Japan, South Korea, India, and Hong Kong.<\/p>\n Its top import origins are China, the United States, South Korea, Japan, and Thailand. [4] [5]<\/p>\n Dependencies<\/strong><\/p>\n Australia is prone to natural disasters; it is dry, and its soil is mediocre compared by world standards for agriculture. [6] The economy is dominated by its service sector. [7] Current state<\/strong><\/p>\n The coronavirus has a marked impact on the Australian dollar, with China being its main trading partner. Crude oil has declined in price and overall commodities have suffered but limited in scale.<\/p>\n It is a possibility that the RBA will engage in some form of quantitative easing to increase Australia\u2019s competitiveness. [8]<\/p>\n Reserve Bank of Australia Monthly Statements<\/strong><\/p>\n In early February, the RBA decided to leave the cash rate unchanged at 0.75 percent because they believed the outlook for the global economy to remain reasonable. They believed there have been signs that the slowdown in global growth from 2018 is coming to an end and expect global growth to be stronger this year, with inflation remaining low. They note one source of uncertainty is the trade dispute between the US and China, as well as the coronavirus. The board also notes continuing signs of a pick-up in housing markets, with mortgage rates at record lows and strong competition for borrowers. [9]<\/p>\n In December the board decided to leave the cash rate at 0.75 as well. Again, they believed the outlook for the global economy to remain reasonable. While the US-China trade dispute is disrupting global trade, most advanced economies\u2019 unemployment rates are low and wages growth has picked up, although inflation remains low. Interest rates are low around the world and some central banks have eased monetary policy in response to subdued inflation [10]. Overall the RBA expected growth and an increase in risk but didn\u2019t know how long the US-China trade dispute would continue, nor did they expect the coronavirus. Why has the easing of monetary policy supported employment and income growth?<\/p>\n In September the RBA decided the leave the cash rate unchanged at 1.00 percent, noting a reasonable outlook on the global economy but that the risks are tilted to the downside. Motivations were the same as those noted in December, but this is likely where long-term government bond yields were noted to have declined to record lows in many countries. Economic growth of the first half of the year was lower than expected, with household consumption reduced by a protracted period of low income growth and declining housing prices. The RBA hoped the low interest rates will make progress in reducing unemployment. [11]<\/p>\n My Take<\/strong><\/p>\n It seems like Australia has a pretty low inflation rate, indicative of an economy that\u2019s not very hot but it\u2019s also not grinding to an absolute halt. Its unemployment hasn\u2019t gone down in a while, which is likely why the RBA is not very interested in changing the cash rate. The US-China trade war and coronavirus are some of the threats to the Australian economy, and it looks like the RBA is quite dovish and just wanting to wait things out, see how other economies do and adjust accordingly.<\/p>\n This is the first time I have looked at Australia in any detail and I know that I will have got some things wrong and I certainly do not know what the \u201cword on the street is\u201d with regards to the economy, government, fires etc SO I would be grateful if any Aussie members could help me, either in the comments below or in the forum?<\/p>\n If you would like to learn how to trade like a professional check out our 5* rated forex mentor program, RISK FREE; by clicking on the \u201cGet Started Today\u201d Button below<\/strong><\/p>\n Sources <\/p>\n","protected":false},"excerpt":{"rendered":" Hi, I explained in yesterdays live training session that one of the first things I ask new private students to do is analyse the major economies. This does not have to be a massively detailed project and everything is available on Google. New private student Mitch, is from the USA. I asked him to look […]<\/p>\n","protected":false},"author":35,"featured_media":215724,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","rank_math_lock_modified_date":false,"footnotes":""},"categories":[4],"tags":[304,305,306,303],"class_list":["post-215723","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-forex-education","tag-australian-economy","tag-trading-the-aud","tag-trading-the-aussie-dollar","tag-why-understanding-basic-economics-improves-your-trading-profits"],"_links":{"self":[{"href":"https:\/\/www.forexmentorpro.com\/blog\/wp-json\/wp\/v2\/posts\/215723"}],"collection":[{"href":"https:\/\/www.forexmentorpro.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.forexmentorpro.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.forexmentorpro.com\/blog\/wp-json\/wp\/v2\/users\/35"}],"replies":[{"embeddable":true,"href":"https:\/\/www.forexmentorpro.com\/blog\/wp-json\/wp\/v2\/comments?post=215723"}],"version-history":[{"count":1,"href":"https:\/\/www.forexmentorpro.com\/blog\/wp-json\/wp\/v2\/posts\/215723\/revisions"}],"predecessor-version":[{"id":219367,"href":"https:\/\/www.forexmentorpro.com\/blog\/wp-json\/wp\/v2\/posts\/215723\/revisions\/219367"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.forexmentorpro.com\/blog\/wp-json\/wp\/v2\/media\/215724"}],"wp:attachment":[{"href":"https:\/\/www.forexmentorpro.com\/blog\/wp-json\/wp\/v2\/media?parent=215723"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.forexmentorpro.com\/blog\/wp-json\/wp\/v2\/categories?post=215723"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.forexmentorpro.com\/blog\/wp-json\/wp\/v2\/tags?post=215723"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nAccording to FMP data, its GDP has shrunk significantly since mid 2018 and its inflation has remained relatively steady. Interest rates have been cut from 1.5% to around 0.75% and the central bank has signalled it is willing to cut them further if necessary to stimulate the 3 core indicators.<\/p>\n![\"\"](\"https:\/\/www.forexmentorpro.com\/blog\/wp-content\/uploads\/2017\/01\/728x90-.jpg "\\"\\"")
<\/a><\/p>\n
\n1: https:\/\/dfat.gov.au\/about-australia\/australia-world\/Pages\/trade.aspx<\/a>
\n2: https:\/\/www.ga.gov.au\/education\/classroom-resources\/minerals-energy\/australian-mineral-facts<\/a>
\n3: https:\/\/www.aph.gov.au\/About_Parliament\/Parliamentary_Departments\/Parliamentary_Library\/pubs\/BN\/1011\/AustResources<\/a>
\n4: https:\/\/oec.world\/en\/profile\/country\/aus\/<\/a>
\n5: http:\/\/www.worldstopexports.com\/australias-top-10-exports\/<\/a>
\n6: https:\/\/www.britannica.com\/place\/Australia\/Economy<\/a>
\n7: https:\/\/en.wikipedia.org\/wiki\/Economy_of_Australia<\/a>
\n8: https:\/\/westpaciq.westpac.com.au\/Article\/42132<\/a>
\n9: https:\/\/www.rba.gov.au\/media-releases\/2020\/mr-20-01.html<\/a>
\n10: https:\/\/www.rba.gov.au\/media-releases\/2019\/mr-19-33.html<\/a>
\n11: https:\/\/www.rba.gov.au\/media-releases\/2019\/mr-19-23.html<\/a><\/p>\n