AUD Australian Dollar: What it is, How it Works, Forex Markets

what is the australian dollar called

With a mass of 15.55 grams (0.549 oz) and a diameter of 31.51 millimetres (1+1⁄4 in), the Australian 50-cent coin is one of the largest coins used in the world today.

Current Australian 5, 10 and 20 cent coins are identical in size to the former Australian, New Zealand, and British sixpence, shilling, and two shilling (florin) coins. Before 2006 the old New Zealand 5, 10 and 20 cent coins were often mistaken for Australian coins of the same value, and vice versa, and therefore circulated in both countries. The UK replaced these coins with smaller versions from 1990 to 1993, as did New Zealand in 2006. Still, some confusion occurs with the larger-denomination coins in the two countries; Australia’s $1 coin is similar in size to New Zealand’s $2 coin, and the New Zealand $1 coin is similar in size to Australia’s $2 coin.

what is the australian dollar called

In 1966, coins were introduced in denominations of 1 and 2 cents (bronze); 5, 10, and 20 cents (cupronickel; 75% copper, 25% nickel); and 50 cents (silver, then cupronickel). The 50-cent coins in 80% silver were withdrawn after a year when the intrinsic value of the silver content was found to considerably exceed the face value of the coins. Aluminium bronze (92% copper, 6% aluminium, 2% nickel) 1 dollar coins were introduced in 1984, followed by aluminium bronze 2 dollar coins in 1988, to replace the banknotes of that value. In everyday Australian parlance, these coins collectively are referred to as “gold coins”.

Understanding the AUD/USD (Australian Dollar/U.S. Dollar) Currency Pair

From the Pound Sterling to the Australian DollarIn 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, used 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 originally developed in Australia to help prevent counterfeiting.

Australia is one of the largest exporters of iron ore and coal in the world; hence, the value of AUD depends heavily on the prices of commodities. During the 2015 energy recession, oil prices reached a ten-year low, and the prices of both iron ore and coal plunged to a recent low. In 1902, a special committee of the House of Representatives, headed by George Edwards, proposed that Australia introduce a decimal currency based on florin. The Banking Royal Commission, in 1937, proposed that Australia introduce a decimal coinage scheme. In August 1960, the Decimal Currency Committee reported supporting decimalization and proposed that a new currency be adopted in February 1963, with the introduction modeled on the substitution of the South African pound in South Africa with the rand.

  1. A new 10 AUD note was launched on September 20, 2017, and a new 50 AUD note was issued on October 18, 2018.
  2. Trading the AUD/USD is also known colloquially as trading the “Aussie.” So in conversation, you might hear a trader say, “We bought the Aussie at 7495 and it rose 105 pips to 7600.”
  3. The AUD/USD is the fifth most traded currency as of 2022 but the AUD is not one of the six currencies that make up the U.S. dollar index (USDX).
  4. Although the value of the dollar fell significantly from this high towards the end of 2008, it gradually recovered in 2009 to 94 US cents.
  5. It is also the official currency of several regions, such as Norfolk Island, Christmas Island, and Keeling Islands.

Australian notes and coins are also legal tender in the independent sovereign states of Kiribati, Nauru, and Tuvalu.[4][5][6] Nauru never had its own currency. Tuvalu and Kiribati additionally had their respective Tuvaluan and Kiribati dollars at par with the Australian dollar. However, both countries no longer produce coinage since the 1990s and have never produced their own banknotes. A new series of AUD polymer notes is being unveiled, starting with the 5 AUD notes introduced in September 2016. A new 10 AUD note was launched on September 20, 2017, and a new 50 AUD note was issued on October 18, 2018. The new 20 AUD bill was launched on October 9, 2019, while the new 100 AUD note was launched on October 29, 2020.

AUD (Australian Dollar): What it is, How it Works, Forex Markets

This contributed to higher interest rates in Australia relative to other countries, inviting currency trades to long AUD relative to JPY, for instance, based on the interest-rate differential between these countries. Like most currencies, the AUD moves versus other currencies due to economic data releases, including the country’s gross domestic product (GDP), retail sales, industrial production, inflation, and trade balances. Natural disasters, elections, and government policy also affect the relative price of AUD, as well as output and market price for various metals and crops.

what is the australian dollar called

AUD (Australian Dollar, or “Aussie”) is the currency abbreviation for the Australian dollar (AUD), the offocial currency for the Commonwealth of Australia. The Australian dollar is made up of 100 cents and is often presented with the symbol $, A$, or AU$. The AUD replaced the Australian pound, which was a holdover from its days as a British colony, in 1966. Early Currency in AustraliaWhen New South Wales was first established in 1788 the English Pound was the official currency, although Spanish Dollars were used quite regularly. In 1813, to try to discourage the illegal use of Spanish Dollars, the centers of the coins were cut out; they became known as ‘holey dollars’ and the cores were called ‘dumps’; this was Australia’s first form of coinage.

The Australian dollar refers to Australia’s official currency and is abbreviated as AUD. It is also the official currency of several regions, such as Norfolk Island, Christmas Island, and Keeling Islands. It is also currently used as the official currency by three sovereign Pacific Island nations – Nauru, Kiribati, and Tuvalu.

What is the Australian Dollar (AUD)?

With respect to coins, 1 AUD and 2 AUD, and 5, 10, 20 and 50 cents are presently in use. The Reserve Bank of Australia (RBA), Australia’s central bank, manages AUD and determines the country’s monetary policy and issues and regulates the money supply. The Australian dollar was adopted on February 14, 1966 and replaced the Australian pound at a conversion rate of 2 AUD per Australian pound. The Reserve Bank of Australia issued polymer banknotes, specifically polypropylene polymer, for the first time in 1988, marking the centennial anniversary of the European colonization of Australia.

Since Australia is one of the world’s largest coal and iron ore exporters, the value of its currency is heavily dependent on commodity prices. During the commodity slump of 2015, oil prices hit decade lows and both iron ore and coal prices dropped to recent lows. As a result, the Australian dollar weakened sharply, falling more than 15 percent against the U.S. dollar reaching parity against the New Zealand dollar (NZD) – levels not seen since the 1970s. Australia also prints polymer banknotes for a number of other countries through Note Printing Australia, a wholly owned subsidiary of the Reserve Bank of Australia.

The Royal Australian Mint also has an international reputation for producing quality numismatic coins. Issues expanded into greater numbers in the 1990s and the 21st century, responding to collector demand. Commemorative designs have also been featured on the circulating two dollar, one dollar, and 20 cent coins. The importance of AUD among forex traders is related to the country’s geography, geology, and government policy. Australia is one of the richest countries in the world in terms of natural wealth, including metals, steel, gems, meat, and fur. Currencies always trade in pairs, with each part of the pair represented by a three-letter abbreviation.

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Over 1.8 million professionals use CFI to learn accounting, financial analysis, modeling and more. Start with a free account to explore 20+ always-free courses and hundreds of finance templates and cheat sheets. Thomas J Catalano is a CFP and Registered Investment Adviser with the state of South Carolina, where he launched his own financial advisory firm in 2018. Thomas’ experience gives him expertise in a variety of areas including investments, retirement, insurance, and financial planning. The Australian dollar is also the currency for Pacific Island states of Nauru, Tuvalu, and Kiribati.

Before Federation in 1901, the six colonies that comprised Australia had separate currencies, all of which closely replicated the British currency system, and were usually exchangeable with each other on a one-to-one basis. Hence Federation was not seen as urgently requiring a single, unified currency. For another 10 years, colonial banknotes and coins continued to be the main circulating currencies. These, however, although having the status of legal tender, are almost never circulated or used in payment of debts, and are mostly considered bullion coins. For instance, the Reserve Bank of Australia did not intervene with economic stimulus to the same degree as the U.S., European Central Bank, and the Bank of Japan following the Great Recession.

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