AUD - Australian Dollar

The Australian dollar is the official currency of the Commonwealth of Australia and its 7 territories – namely, Ashmore and Cartier islands, Christmas Island, Cocos Islands (also known as Keeling Islands), Coral Sea Islands, Heard Island and McDonald Islands, and Norfolk Island. Four other neighbouring countries also use this currency – specifically Kiribati (alongside the Kiribati dollar), Nauru, Tuvalu (alongside the Tuvaluan dollar), and Zimbabwe.

The International Organization for Standardization (ISO 4217) gave the Australian dollar its currency code of AUD and signed it with $ locally. For international purposes, it is denoted as A$, which is also used to distinguish it from other dollar currencies. For foreign exchange traders, the Australian dollar is more popularly known as the "Aussie" or the "Pacific Peso". In Australia, the Australian Dollar has an inflation rate of 2.9%, as reported by the Australian Bureau of Statistics, for the first quarter of 2014. It is among the top 10 most traded currencies in the world. In March 2014, AUD ranked 6th, with a trade share of roughly 5% across the globe, as reported by China Daily. The AUD dropped a notch behind the Canadian dollar, from an 8.6% trade share and a rank of 5th in April 2013.

This currency was first issued on February 14, 1966. It replaced the Australian Pound, which was in use from 1910-1966. Many names were suggested for the new currency, such as Kanga, Oz, and Quid. A monarchist and prime minister named Sir Robert Menzies won the favor of the council with his suggestion of Royal. However, the name was found to be rather unpopular, and it was changed again in favor of the Australian dollar. The Reserve Bank of Australia created the trial designs and printed the bank notes for circulation.

The Australian Dollar is subdivided into cents (or centavos), which are 1/100th of a dollar and are denoted as ¢. Like most currencies, the Australian dollar comes in the form of coins and notes for ease of use and trading. AUD coins have the following denomination: 5 cents, 10 cents, 20 cents, 50 cents, 1 dollar, and 2 dollars. For the bank notes, there are denominations in 5 dollars, 10 dollars, 20 dollars, 50 dollars, and 100 dollars. The Royal Australian Mint in the federal capital city of Canberra produces all coins. The coins are made from a combination of copper and nickel.

Originally, the coins had silver content, especially the 50 cent coin. However, the production cost was deemed higher than the actual coin value, so the content had to be changed. All current coin designs portray the Queen of Australia, Her Majesty Queen Elizabeth II. The effigy of the Queen's portrait was designed by Ian Rank-Broadley, an acclaimed British sculptor. The design on the other side of the coin was done by Stuart Devlin, an Australian-born artist. The first series of bank notes, released in 1966, were made of paper. They had the same color as the Australian pound bank notes that they replaced, except for the 5$ note. Initially they bore the title of "Commonwealth of Australia". It was then changed to "Australia" in 1973. The 50$ note was introduced in 1973, while the 100$ note was introduced in 1984. This was in response to inflation and the need for bigger denominations.

Australia was one of the first countries to use plastic for their bank notes. In 1988, Note Printing Australia produced the first polymer plastic bank notes, as ordered by the Reserve Bank of Australia. The notes contained an optically variable image of Captain James Cook in a transparent window. This was done to commemorate the 200th anniversary of European settlement in Australia. However, there were some issues encountered with the new security features of the bank notes. In their 10$ notes, the holographic image is detaching from the note. The Reserve Bank of Australia, despite encountering these problems, still believed in the potential of using plastic in production of bank notes. They prepared a new series of polymer bank notes, starting with the 5$ series, in 1992. The new series and designs proved to be more secure, and the use of polymer bank notes continued in circulation.

When it comes to exchanging the Australian dollar to other currencies, it used to have a fixed exchange rate until 1983. It was initially pegged against the British pound (GBP) at a rate of 1 AUD to 1 GBP. But due to fluctuations in value, the exchange rate was down to 1 AUD to 0.80 GBP. Australia followed the Bretton Woods System in the period of 1946 to 1971. It was a fixed exchange-rate system that pegged the US dollar to gold. In 1974, Australia adapted a different system, know as Traded Weight Index (TWI), where the dollar was pegged against a basket of currencies. In December 1983, Prime Minister Bob Hawke, together with treasure Paul Keatin, floated the Australian Dollar. It means that AUD is on longer managing its value by reference to foreign currencies.