Article by Currency Information and Research

History of the Australian Dollar

 The Australian dollar is the specified currency of the major seven Australian territories. It is denoted by the $ sign; and the code is AUD. Nowadays, it is the fifth most traded currency in the world. It has gained popularity among the traders because of the high interest rates in Australia, the stability of the Australian economy and also the stable political system. All of these factors contribute to the benefits of investing in the Australian dollar.

  The Australian dollar is available in the form of coins and banknotes. The Australian currency was first decided to be named “The Royal” in February 14th 1966, however, this name proved to be very unpopular and it was finally named the “Dollar”. In 1966 coins were introduced, they are in the form of 1,2,5,10,20 and 50 cent coins. All of the Australian coins have Queen Elizabeth the II’s portrait on the side, as she was reigning at that time. In 1988 the Reserve Bank of Australia introduced the first polymer banknote. Which were color coded: $5 pink; $10 blue; $20 red; $50 yellow; and $100 green.

 In 1973 the Australian dollar was valued at US$1.4875. In the following years the fluctuation was limited to this range: US$1.485 - US$1.490. The stability in the currency’s fluctuation  compared to the US dollar made it more popular among traders. The Australian dollar hit its record breaking value in July 2011. During this time it was traded at $1.1080 against the US dollar. The Australian economy is very stable compared to the rest of the other countries. In the past years Its trade was only dependant on agriculture, raw materials, and minerals, therefore its value varied in the business cycle. Although, this currency is now recommended by the economists for trading. Lack of intervention of the central bank is one of the major factors of its success in the trading market, as it provides a simpler method of trading rather than going through a long process with the bank.

 Another, important factor is the stability of the Australian government and the economy. The Australian economy is very strongly developed, their market economy has a GDP of US$1.23 trillion. The main emphasis of the country is on its exports. Thus the economy is increasing rapidly. In the past decade the growth rate of the economy was estimated to be 3.4% per year. This country has the lowest debt compared to the rest of the world. Therefore, it is ranked high in the trading market. Australia has been ranked as the 19th largest importer and exporter. The main trading partners of Australia are China,Japan, Korea, India and the USA. It is also ranked as the world’s safest bank of 2011. Also, the taxation varies from state to state depending on the requirements.

  All of the above mentioned factors contribute to the rise in the use of the Australian dollar in the trading world, as it is safe even in times of recession. This year before Christmas the Australian stock was boosted up to 1.2% compared to the US stock. Australia has maintained a fixed exchange rate; this reflects how strong their economy is and how stable its government is.

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