The Australian Dollar is the form of currency used by the Commonwealth of Australia. This region includes Norfolk Island, Christmas Island, and Cocos (Keeling) Islands, as well as the Pacific Island regions of Tuvalu, Nauru, and Kiribati. The Australian currency is typically contracted through the dollar sign ($). The dollar is sometimes distinguished from other currencies using the dollar by A$. It can be divided into 100 cents.
After the US dollar, the Euro, Yen, and Pound Sterling, the Australian dollar is the currency that is traded fifth most through the global foreign exchange markets. Currency traders are fond of the Australian dollar for a number of reasons, including the interest rates in Australia that are comparatively higher than rates elsewhere in the world, the relative independence from government intervention that the foreign exchange market enjoys, the usual consistency of the economy and political system of Australia, and the majority view that there are diversification options in the Australian dollar. An extra reason why many view the Australian dollar as having more diversification benefits is due to its increased proximity to Asian economies in comparison to more western currencies, as well as the commodities cycle.
Pence, pounds, and shillings were scheduled to be replaced by decimal forms of currency in the 1960s, which led to many suggestions for new names for the new currency. Robert Menzies was the prime minister of Australia in 1965, as well as a monarchist, which led him to wanting to call the new currency the royal. There were other names proposed that had more exotic leanings, such as the boomer, the oz, the roo, the austral, the emu, the kanga, the kwid, the dinkum, the digger, and the ming, which was Menzies’ nickname. Due to the influence of Menzie, the government decided to go with the royal, and the Reserve Bank of Australia prepared and printed trial designs of the new currency. However, the name chosen for the currency was not very popular among the people, and as a result, it was eventually dropped and replaced with the dollar.
The Australian pound was introduced in 1910 and was classified as a distinct currency value from 1931 onward when it was devalued in comparison to the pound sterling. It was eventually replaced on February 14th, 1966, by the dollar. The conversion rate for the novel currency at the decimal level was one Australian pound for two dollars, or one dollar for ten Australian shillings. The government proposed an exchange rate that would be related to the pound sterling so 8 shillings would be equivalent to 1 dollar, and $2.50 equivalent to 1 pound sterling. However, in 1967, Australia moved away from the Sterling Area because the pound sterling lost its value in comparison to the United States dollar while the Australian dollar maintained its value. At that time, it continued to be worth slightly less than a United States dollar, with 1 Australian dollar being equivalent to 1.12 United States dollars.
Coins were introduced to the Australian market in 1966 with several different denominations, from 50 cents at the high end to 20, 10, 5, 2, and 1 cent at the lower end. The original 50 cent coins were minted with a large amount of silver and were removed from circulation shortly after a year because there was concern that the intrinsic value of the sliver included in the coin would surpass the stated value of the coins themselves. In 1984, one dollar coins were brought into circulation, while two dollar coins entered circulation in 1988. One and two cent coins were removed from circulation and discontinued after 1991. The 40th anniversary of the use of decimal currency in Australia was in 2006, and in commemoration of this milestone, the mint proof and uncirculated sets in 2006 added one and two cent coins. Transactions in cash in Australia are rounded up or down to the nearest five cents. Seignorage has continued to play a role for coins that have been discontinued, which is common with the majority of public changes to systems of currency. Every coin in the current currency shows the face of Queen Elizabeth II, the head of state, on the obverse, and coins are produced through the Royal Australian Mint.
Australia has made a tradition of issuing 50 cent coins for commemorative occasions. The first commemoration occurred in 1970 to remember the exploration James Cook made along the Australian continent’s east coast. The next was in 1997 when a coin was made for the Silver Jubilee of Queen Elizabeth II. The wedding of Lady Diana Spencer and Charles, Prince of Wales in 1981 was another event, while the 1982 Brisbane Commonwealth Games was another, as was the 1988 Australian Bicentenary. There were more issues in the 1990s as well as in the 21st century; these were made in response to increased demand from collectors. In the last few decades, Australia has also issued special versions of the existing 20 cent and one dollar coins.
The portrait used to depict Queen Elizabeth II located on the opposite side of the coin has been changed to some degree over the years. In 1966, the first change occurred, which was also when the decimal system came to the currency. The next change occurred in 1985, when the Queen was given a new pose and crown. The most recent of the changes occurred in 1999, when the portrait of the Queen was changed further to make it more appropriate for her age. A commemorative 50 cent coin was circulated in 2000 by the Royal Australian Mint in order to celebrate the Royal Visit conducted by the Queen at that time. This coin made use of a different kind of portrait of the Queen than that found at the time on other pieces of Australian currency. It was the first time in the history of the currency in which the Australian coin did not have the same kind of representation of the Queen as that found in other realms of the Commonwealth. The regular portrait of the Queen reappeared on the 50 cent coins in the following year.
There are several types of five dollar coins currently in circulation. Some are made of bi metal or of aluminium and bronze, and many gold and silver bullion coins can be found in higher denominations. These are typically not used to pay for items, although they can be as they are considered to be legal tender.
The current 20 cent, 10 cent, and 5 cent coins in circulation look exactly like the sixpenny, two shilling (florin), and shilling coins that were used formerly in Britain, New Zealand, and Australia. These coins were replaced by smaller versions in the United Kingdom in 1990, and New Zealand did the same in 2006, while they simultaneously stopped issuing the 5 cent coin, effectively removing it from circulation. The 50 cent Australian coin has approximately 15.55 grams of mass and is approximately 31.51 mm in diameter, which makes it one of the largest coins currently used anywhere on Earth. New Zealand coins at the 20, 10, and 5 cent denominations were frequently mistaken for their equivalent value Australian coins, since they looked very similar in size and shape.
The first versions of the Australian dollar released as paper issues date back to 1966. The $20, $10, $2, and $1 notes were exactly equivalent to their former versions in pound banknotes. The $5 note first became available in 1967; the banks waited until people had become familiar with the decimal currency before releasing the paper notes. In the past, there had not been a 2 pound 10 shilling note that held equivalent value. The $50 note first became available in 1973. In 1984, a coin replaced the $1 note, and a $100 note also entered circulation. The $2 note was replaced in 1988 with a coin.
In 1988, the Reserve Bank in Australia released the first polymer banknotes. They were specifically made from polypropylene polymer. Note Printing Australia produced them. They were created to mark the 200th anniversary of when Europeans first settled in Australia. Today, all paper currency in Australia is made from some form of polymer.
To aid the visually impaired in choosing currency, different notes have different sizes, depending on their assigned denominations. All notes share the same height; they vary by their lengths in accordance with their value. The $100 bills, therefore, are the longest, while the $5 bills are the shortest. Each paper note also has its own colour code. $100 bills are coloured green, $50 are coloured yellow, $20 are coloured red, $10 are coloured blue, and $5 are coloured pink. Security features have also been added to each of the bills. They have a transparent window that contains a picture of Captain James Cook that varies under different light settings. Additionally, each note also contains a star with seven points; the star contains only half of its print on each side of the bill. There is also a picture of the Coat of Arms for Australia that can only be seen when it is held with a light behind it. Banknotes in Australia were the first around the globe to use all of these features for security.
Value of the Australian Dollar
The Australian dollar was introduced in 1966. At this point, relationships between various forms of international currency depended on the Bretton Woods system, which was a rate system using a fixed exchange and based upon the United States dollar. However, rather than basing the Australian dollar against the United States dollar, it was balanced against the British pound. The equivalent value was close to that of 1 gram of gold. The Australian dollar was floated on the 8th of December in 1983. This allowed the value of the dollar to vary in accordance with supply and demand from money markets across the globe.
In the following two decades, the highest value attained by the Australian dollar in comparison to the United States dollar was slightly more than 96.6 United States cents. This was achieved on the 14th of march in 1984. The lowest value the Australian dollar ever reached once it was floated onto the market came in April 2001, when it was worth approximately 47.7 United States cents. However, the Australian dollar would bounce back to a value slightly past 96 United States cents in the middle of 2008, and later that year, surpassed 98 cents on the United States dollar. Although the Australian dollar dipped significantly from the high it reached as the year 2008 came to a close, the currency gradually became stronger in 2009 until it reached 94 United States cents. On the 15th of October in 2010, the Australian dollar reached an equivalence for the first time in its history with the United States dollar since it became a currency that could be traded freely.
Exchange Rate Policies
Changes in Australian dollar exchange rates take place slightly differently than they do in other countries. The balance of trade in Australia has depended for many years primarily on exports of natural resources such as agricultural products and minerals. As a result, the relative value of the Australian dollar can change by great amounts during the business year. When global booms occur, during which raw materials may be exported in great numbers from Australia, the dollar can rally significantly. However, at times when the prices of minerals slump or when spending in Australia surpasses the outlook for export earnings, the value of the dollar may decline. This propensity for change relative to the international economy typically occurs in the opposite direction with the majority of other major currencies on the market, which tend to increase in popularity during domestic slumps as traders transfer fiscal value into cash from stocks that are falling. Due to this high volatility and unusual pattern of movement in exchange rates, the Australian dollar has become one of the currencies that is traded most frequently on the global market.