AUD - FOREX Handbook

The Australian dollar (sign: $; code: AUD) is the currency of the Commonwealth of Australia, including Christmas Island, Cocos (Keeling) Islands, and Norfolk Island, as well as the independent Pacific Island states of Kiribati, Nauru and Tuvalu. Within Australia it is almost always abbreviated with the dollar sign ($), with A$ sometimes used to distinguish it from other dollar-denominated currencies. It is subdivided into 100 cents.

As of 2011, the Australian dollar is the 5th most traded currency in the world, accounting for 7.6% of the world’s daily share. It trades in the world foreign exchange markets behind the US dollar, the euro, the yen and the pound sterling. The Australian dollar is popular with currency traders, because of the comparatively high interest rates in Australia, the relative freedom of the foreign exchange market from government intervention, the general stability of Australia’s economy and political system, and the prevailing view that the Australian dollar offers diversification benefits in a portfolio containing the major world currencies, especially because of its greater exposure to Asian economies and the commodities cycle. The currency is commonly referred to by foreign-exchange traders as the “Aussie“.

The most popular Australia Dollar exchange rate is the AUD to GBP rate[/td_block_text_with_title]

Australian Dollar History

With pounds, shillings and pence to be replaced by decimal currency on 14 February 1966, many names for the new currency were suggested. In 1965, the Prime Minister, Sir Robert Menzies, a monarchist, wished to name the currency the royal. Menzies’s influence resulted in the selection of the “royal,” and trial designs were prepared and printed by the Reserve Bank of Australia.

Early Currency in Australia

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When New South Wales was first established in 1788 the English Pound was the official currency, although Spanish Dollars were also used. In 1813, to try to discourage the illegal use of Spanish Dollars, the centers of the coins were cut out and they became known as ‘holey dollars’ and the cores were called ‘dumps‘. This was Australia’s first form of coinage.

From the Pound Sterling to the Australian Dollar

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In 1825, the government imposed the Sterling standard and British coins began to be minted in Australia. These silver and bronze coins continued to be used until 1910, when a new national currency, the Australian Pound, was introduced. The Australian Pound was fixed in value to the Pound Sterling and, as a result, also used as a gold standard. In February of 1966, the Australian Dollar (AUD) was introduced under a decimalized system; dollars and cents replacing the pounds, shillings, and pence. In 1988, banknotes were converted to polymer, a technology developed in Australia to prevent counterfeiting.

Importance of the Australian Dollar

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The central bank in Australia is called the Reserve Bank of Australia. The Australian dollar is also referred to as buck, dough, or the Aussie. The Australian Dollar is known as a commodity currency due to its substantial raw material exports. Due to its relatively high interest rates, the Australian Dollar is often used in carry trades with the Japanese Yen.

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Currency Facts

Name: Australian Dollar

Symbol: $ Cent: c

Minor Unit:
1/100 = Cent

Central Bank Rate: 2.5

Top AUD Conversion:
AUD/GBP

Top AUD Chart:
AUD/GBP Chart

Inflation: 2.4%

Nicknames: Buck, Dough

Coins:
Freq Used: $1, $2, 5c, 10c, 20c, 50c

Banknotes:
Freq Used: $5, $10, $20, $50, $100

Central Bank:
Reserve Bank of Australia
Website: http://www.rba.gov.au

Users: Australia, Christmas Island, Cocos (Keeling) Islands, Kiribati, Nauru, Norfolk Island, Ashmore and Cartier Islands, Australian Antarctic Territory, Coral Sea Islands, Heard Island, McDonald Islands.