What is Australian Dollar (AUD)? – Definition for beginners
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The Australian Dollar (AUD) is the currency of the Commonwealth of Australia. AUD stands for Australian Dollar. The Australian dollar sign is $.
Commonwealth states of Australia include Cockle Islands, Norfolk Island, Pacific Island States, Christmas Island, and Australia. In the global foreign exchange market, the dollar is the fifth most popular currency in the world. The Australian dollar is also known as the “Aussies.”
The Australian dollar became floating-free money in 1983. Its high popularity in the Forex trading market depends on geology, geography, and public policy. Australia is one of the wealthiest nations on the globe. It boasts natural resources like metals, coal, diamonds, meat, and wool.
The AUD, or Australian Dollar, is Australia’s official currency and is also used by many countries in the Pacific Islands. The Australian dollar was introduced in 1966 to replace the Australian pound, initially pegged to the US dollar. It was distributed free of charge in 1983 and had been going on ever since. The Australian dollar is a popular currency in currency trading pairs and consistently ranks among the top five most traded currencies.
AUD (Australian Dollar) stands for Australian Dollar (AUD), the official currency of the Commonwealth of Australia. The Australian dollar is divided into 100 cents and is often denoted by a $, A$, or AU$ symbol. The Australian dollar replaced the surplus of the Australian pound, which was a British colony in 1966.
The Australian dollar is also the currency of the island provinces of the Pacific Ocean, Nauru, Tuvalu, and Kiribati.
The history of the Australian dollar (AUD):
- The Australian dollar (AUD) replaced the Australian pound in 1966. The currency had a price of AUD 2 = 1 pound, and the first coins introduced were 1 cent, 2 cents, 5 cents, 10 cents, 20 cents, and 50 cents.
- In 1967, Australia backtracked the British pound and pegged the Australian dollar to the US dollar at the rate of 1 Australian Dollar = 1.12 US Dollars.
- In 1983 the Australian dollar became a floating currency.
- Australian dollar coins were introduced in 1984. In 1988, a two-dollar coin was introduced.
- In 2006, 1% and 2% of coins went out and ceased circulation.
- Australia has introduced unique coins and banknotes to commemorate events such as the 1982 Commonwealth Games.
Early Australian currency
When New South Wales was founded in 1788, the British pound was the official currency, but the Spanish dollar was used regularly. In 1813, coins were cut to prevent the illegal use of Spanish dollars. They became known as “Holey Dollars,” and the core became a “dump.” It was Australia’s first coin type.
Moving from pound sterling to Australian dollar
In 1825, the government introduced the sterling standard and began mining British coins in Australia. These coins and bronzes continued to be used until 1910, when a new national currency, the Australian pound, was introduced. The Australian pound was pegged to the pound, and as a result, the gold standard was used.
Three years down the line, the first series of Australian banknotes were released. In February 1966, the Australian Dollar (AUD) was denominated in decimal. Dollars and cents replaced the pound, shilling, and pence.
In 1988 banknotes were converted to polymers, a technology initially developed in Australia to prevent counterfeiting.
What is AUD (Australian Dollar)?
The Australian dollar was first introduced on 14 February 1966, replacing the Australian pound. At the time, it was tied at two British pounds per pound. In 1967, Australia lowered the peg to the sterling pound and pegged it to the US dollar at 0.892929 per US dollar. In 1976 it became a commercial-weighted index. The Australian dollar became a free-floating currency in 1983.
The Australian Dollar Bank (RBA which is Australia’s central bank, manages the Australian Dollar (AUD), determines Australia’s economic policy, and controls Australia’s money supply. Whole-owned by the Australian government, the bank was founded in 1960.
Australia is one of the world’s largest exporters of coal and iron ore, so the value of its currency is highly dependent on raw material prices. During the raw material market decline in 2015, oil prices hit their lowest level in a year, while the prices of iron ore and coal recorded recent declines. As a result, the Australian dollar (AUD) sharply declined, falling more than 15% against the US dollar and reaching par with the New Zealand dollar (NZD). This is an unprecedented level since the 1970s.
The importance of the Australian dollar
The Central Bank of Australia is the Central Bank of Australia. The Australian Dollar is the fifth largest trading volume in the world and is also known as the Australian Dollar or AU Dollar.
The Australian dollar is known as the currency of commodities due to its significant export of goods.
As a result, the Australian dollar (AUD) is affected by Chinese and other Asian import markets.
Due to its relatively high-interest rates, the Australian dollar is often used for trading the Japanese yen. Trading is a strategy to buy a high-yielding currency by selling a low-yielding currency.
- Australia has a highly developed and established modern economy.
- In 2011, Australia ranked 13th in GDP.
- Australia’s economy depends on the services sector, which accounts for 60% of the GDP.
- Imports are computers, machinery, telecommunication parts, home appliances, petroleum products, and crude oil.
- Exports include gold, meat, alumina, wool, wheat, iron ore, and coal. Total exports in 2010 were estimated at $2.17 billion.
AUD and Forex Markets
The Australian dollar’s popularity among currency traders depends on geology, geography, and government policy. Australia is one of the wealthiest countries globally because of its natural resources, which include metals, coal, diamonds, meat, and wool. Australia is also a regional powerhouse.
The AUD/USD currency pair tends to be negatively correlated primarily with the USD/JPY pair and USD/CAD. This is mainly because the dollar is the quote currency in these cases. AUD/USD is often contradictory to USD/CAD, especially since AUD and CAD are commodity blocks. AUD/USD trading is also known as “Australian” trading. On the other hand, AUD and NZD are positively correlated.
As of 2019, the Australian dollar was the 5th most traded in the forex market globally, accounting for around 7% of trades. The high trade volume is partly due to Australia’s political and economic stability and limited government intervention in the foreign exchange market.
FAQ – The most asked questions about the Australian Dollar:
What is the specialty of the Australian dollar?
The Australian Dollar, the official currency of the Commonwealth of Australia, is one of the world’s most multicolored currencies. The currency of Australia is the fifth most traded currency in the world.
What is the value of an Australian dollar?
Currently, the value of one Australian Dollar is equal to 0.67 US dollars.
How can I exchange my Australian currency?
First, you must choose the most trusted and reputed foreign exchange to convert your Australian Dollar. Choose the Australian currency, the currency of the country you would like to swap, and the amount you want to swap. You can select a delivery option and make the necessary payment online. You will get a confirmation mail from the exchange and the amount you will receive for the Australian Dollar you swapped.
How can I make a safe AUD transaction?
Always choose the most reputed foreign exchange to make your Australian Dollar transactions safe and secure. These exchanges can offer their customers a branch pick-up option and doorstep delivery services. You will also get the best rate for your Australian currency.
Last Updated on February 17, 2023 by Andre Witzel