One of the biggest export earners for Australia comes from the mining industry. Any appreciation of the commodities prices will boast the export earning of Australia.
This will benefit the value of the Australian dollar. Here, the forex traders will react by buying (asking) the AUS/USD currency pair since the Australian dollar will strengthen against the US dollar. Another major export earner for Australia comes from the agricultural sector.
Therefore, if Australia is facing widespread drought, this will cause the agricultural sector to decrease its contribution to export earning for the Australian economy. As a result, the Australian dollar will depreciate in relation to the US dollar. Therefore for traders to profit for this situation, they should, sell (bid) the AUS/USD currency pair as the Australian dollar will slide against the US dollar.
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