In Australia, they use a currency called a dollar and it is controlled by the Reserve Bank of Australia. The Australian dollar is divided into 100 cents and it is one of the most stable currencies in the world. At the time of writing the Australian dollar exchange rate is: 1 AUD = 0.7917 USD / 1 USD = 1.2630 AUD, according to our currency converter.
During 2016, the Australian dollar was the fifth most traded currency in the world which is a sign of the massive influence it has on the global market.
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In Australia, the Australian dollar is just called dollar and because it shares its name with the American dollar they also share the same classic sign: $. In order to differentiate the AUD from other currencies also called dollar, you normally add an “A” after the sign like this: $A. Within currency trading and on the international forex market the Australian dollar is called “Aussie dollar.”
Like every currency in the world, the Australian currency has a unique three letter ISO 4217 code. The code for the Australian dollar is AUD.
Australia is currently performing an update of all their denominations. A new five dollar bill was introduced in September 2016 and a new 10 dollar bill is planned for 2017. When we wrote this article the following coins and bills were being used in Australia:
- 5 c
- 10 c
- 20 c
- 50 c
All coins in Australia have the Queen of England, Elizabeth II, printed on one of the sides. On the other side of the coin, you’ll find typical Australian symbols such as kangaroos, lizards, and the Australian coat of arms.
The following bills are also being used in Australia:
- $5 – Exists in two versions. One version with Queen Elizabeth II on one side and the parliament building in Canberra on the other side. And another version with Sir Henry Parkes on one side and Catherine Helen Spence on the other.
- $10 – Has the late Australian author, Banjo Paterson, on the front and journalist Dame Mari Gilmore on the back.
- $20 – Has a portrait of Mary Reibei, a famous English business woman in Australia, printed on the front. On the back side of the bill, there is a picture of late Australian politician John Flynn.
- $50 – Has the influential Indigenous AustralianDavid Unaipon on the front and a portrait of the first woman to ever get elected to the Australian Parliament, Edith Cowan, on the back.
- $100 – Has the opera singer Nellie Melba printed on the front and the World War I officer John Monash on the back.
History of the Australian Dollar
The dollar was first introduced as a method of payment in early 1966 replacing the older Australian pound that had been used for most of the 1990s.
Pound – The Australian pound was pegged and completely based on the British pound up until 1931 when the currency got reevaluated. Since then the Australian dollar has been fixed sometimes and floating at other times. Right now the AUD is floating and its value is therefore based on the market.
Dollar – In 1963, the Australian Parliament voted to rename the current currency. Many different name proposals were sent in and for a long time, the name “Royal” was a favorite. When the change was made three years later 1 pound was exchanged for 2 dollars.
The Australian Dollar Today
The Australian dollar has earned a position as one of the world’s most trustworthy and predictable currencies. It also acts as a stabilizer in the region and is currently being used as the official method of payment in the following nations:
- Christmas Island
- Cocos (Keeling) Islands
- Norfolk Island
Together these nations make up a monetary union called the Commonwealth of Australia.
Due to the predictable nature of the Australian dollar, it also happens to be one of the most traded currencies on the forex market. Last year in 2016 the currency represented 6.9% of the daily trade.
For a long time, AUD had a fixed currency exchange rate which means that its value was pegged to another currency. For two decades the currency was either based on the British pound or the American dollar. In 1983, the currency was changed from a fixed rate to a floating exchange rate and its value is now based on the market.
Trade the Australian Dollar
One of the reasons to why the Australian dollar has gained such popularity on the international forex market is because of Australia’s stable economy. Because of the country’s location, it has been able to import and export products and services with most of Asia for a long time. This has lead to a strong economy but also an interest in buying the Australian currency in pairs with leading Asian currencies. It is also common to buy AUD together with other world leading currencies such as USD, EUR, and GBP.
AUD/USD – is obviously popular due to the two currencies influence on the market. These two currencies have the ability to impact and inspire markets in Asia, Europe, and the US.
AUD/EUR – is a good investment option since it’s always easier to predict how strong currencies will act together. This currency pair is also evident being the fact that it’s a combination of the world’s second and fifth most traded currencies.
AUD/JPY – is one of the currency pairs that are popular among Asian and Australian investors. The two countries have a long history with export and import between each other and there is no wonder why there is a huge interest in buying them together.