Background of the Australian Dollar
Officially formed in 1901 from a federation of British colonies, the Commonwealth of Australia utilized the Australian pound (different from but pegged to the British Pound Sterling) as its national currency. In the years following World War II, the Australian pound was pegged to the U.S. dollar, a convention provided for under the terms of the Bretton Woods Conference of 1944.
The modern Australia dollar was introduced in 1966 under the name “royal,” when it officially replaced Australian pounds and pence. The “royal” name was eventually dropped in favor of “dollar.” Beginning with the United States’ formal abandonment of its gold standard in 1971, the Australian dollar was pegged to a variety of international currencies dominated by the U.S. dollar, finally becoming a free-floating currency in 1983.
The Australian dollar is sometimes referred to in currency trading circles as the “Aussie.” The common symbol is A$, though locally it is often expressed as $A, and an example price might be expressed as $A10. Australia is generally credited with being the first nation to issue bank notes manufactured from polymer, a durable, synthetic substance most commonly associated with the type of flexible packaging used by overnight courier services.
Ranking sixth on the list of most frequently traded world currencies, the Australian dollar benefits from the country’s stable economy and government policies which discourage intervention in the foreign exchange markets. The Reserve Bank of Australia is responsible for the nation’s monetary policy.
The Australian dollar is divided into 100 cents. Denominations for coins are 5c, 10c, 20c, 50c, $1 and $2, with prices rounded to the nearest 5c. Denominations for banknotes are $5, $10, $20, $50 and $100.