Company: FXA
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0000950170-25-027258
Chunk: 62

Company: Invesco CurrencyShares Australian Dollar Trust
Filing Date: 2025-02-26
Form: 10-K
Item: Item 7
Chunk 62
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The Australian dollar (AUD/USD) ended 2023 flat. In the first quarter, despite its strong January rally as Australian inflation surged to a 33-year high, raising prospects for more aggressive rate hikes from the Reserve Bank of Australia (RBA), and the US dollar weakened, the AUD flipped into losses through the rest of the quarter on the plunge in commodities. Broad commodities have continued to trend lower through the second quarter, pressured by macro concerns and China’s disappointing recovery, while the USD has remained somewhat supported as the market awaited more clarity on the Fed’s rate hike path forward, both generally bearish for the AUD. While commodities prices finally started to rebound in the third quarter, renewed dollar strength stole the show, pushing the AUD lower. Like many other currencies, however, the fourth quarter marked significant gains due to US dollar weakness – unlike the Fed, which was expected to shift to rate cuts, the RBA had left open the door for further rate hikes, providing a further boost for its currency.

Additionally, the interest rate paid by the Depository has generally remained flat over the past year with the current interest rate of 1.92%, as set forth in the FXA Rate Chart above. As long as the interest income, if any, exceeds the Sponsor's fee and the interest expense on currency deposits, the Trust will incur a net comprehensive income. 

Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Sponsor’s management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period covered by this report.

In addition to the description below, please refer to Note 3 to the financial statements for further discussion of our accounting policies.

The functional currency of the Trust is the Australian Dollar in accordance with ASC 830, Foreign Currency Translation.

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