Lexi Webster
The Australian dollar is the official currency of Australia and several independent countries and territories in the South Pacific. It is also legal tender in the independent sovereign states of Kiribati, Nauru, and Tuvalu. In 2016, it was the fifth most traded currency in world foreign exchange markets. In this topic, we will learn about the history of the Australian dollar, its popularity among currency traders, and the correct way to write it.
| Characteristics | Values |
|---|---|
| Currency Name | Australian Dollar |
| Currency Code | AUD |
| Symbol | $ or A$ |
| Coins | 5 cents, 10 cents, 20 cents, 50 cents, 1 dollar, 2 dollars |
| Banknotes | 5, 10, 20, 50, 100 |
| Popularity Ranking | 5th in 2016 |
| Exchange Rate in 1967 | 1 AUD = 1.12 USD |
| Issuing Authority | Reserve Bank of Australia |
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What You'll Learn
Australian dollar banknotes and coins
The Australian dollar was introduced in 1966, when Australia changed to decimal currency and replaced the pound with the dollar. The $1, $2, $10, and $20 notes had exact exchange rates with the former pound notes. The $5 note was issued in 1967, the $50 note in 1973, and the $100 note in 1984.
The $1 note was replaced by a $1 coin in 1984, and the $2 note was replaced by a smaller $2 coin in 1988. The $1 and $2 coins are gold-coloured, while the 5, 10, 20, and 50-cent coins are silver-coloured. However, none of the coins are made of gold or silver. They are made from metals such as copper, aluminium, and nickel.
The Royal Australian Mint in Canberra produces the coins, and the Reserve Bank of Australia prints the notes. Each Australian coin has a heads side and a tails side. The heads side features a picture of Queen Elizabeth II and the year it was made. Newer coins will feature a portrait of King Charles III. The tails side has a unique Australian design and indicates the coin's value. Each coin has a different design and size, making it easy to distinguish between denominations by touch.
The Reserve Bank of Australia introduced the first polymer banknote in 1988, and today, all Australian notes are made of polymer plastic. The $5 note, issued in 1992, was the first to be printed on polymer. Polymer notes are stronger, harder to counterfeit, and more durable than paper notes. They also incorporate advanced security features, such as a see-through window and tactile features like Braille dots for the visually impaired.
Australian notes feature important Australians and special Australian designs. Each note has a distinct size and colour, making it easy to differentiate between denominations. The current denominations of banknotes in circulation are $5, $10, $20, $50, and $100.
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Writing currency in business
When writing about Australian dollars in a business context, it is essential to ensure clarity and consistency in your currency representation. Here are some guidelines to follow:
Using Symbols and Abbreviations
The standard way to represent Australian dollars is to use the dollar sign ($) followed by the amount, for example, $10. This format is widely recognised and accepted in business writing. When the context is clear, and it is understood that you are referring specifically to Australian dollars, this simple "$" format is sufficient.
However, if there is a possibility that your audience might be confused about the currency, it is essential to add a country abbreviation before the dollar sign. For Australian dollars, use "A$" (without a space between "A" and "$"). This distinction is particularly important when your content is intended for an international audience or when mentioning multiple currencies. For example, you would write "A$19.49 per hour" to indicate that a journalist was being paid in Australian dollars while posted in Hong Kong.
Decimal and Fractional Amounts
When dealing with amounts less than a dollar, you have two options. You can express the value as a decimal, ensuring you always use two digits after the decimal point (for example, $0.49). Alternatively, you can write out the amount in cents using the letter "c" after the numerals with no space in between (for example, $10c). If the amount is less than 10 cents, include a leading zero (for example, $0.05 or $05c).
Millions and Billions
When writing about millions or billions of Australian dollars, you have a few options. You can spell out the full word ("million" or "billion") in the text and use "m" or "bn" in tables or brackets for brevity. For example, you could write "10 million (10m)" or "10 billion (10bn)". According to the Australian Government's style manual (2002), using a lower-case "m" or "bn" is preferable to using "M" or "Bn" as long as the context is clear. However, under ISO 1000:1992/Amd 1:1998, which Australia adheres to, millions should be represented by "M".
Former Australian Currency
Before February 14, 1966, Australia's currency was denominated in pounds (£), shillings (s), and pence (d). As these units are no longer widely recognised, it is recommended to write out these amounts in words rather than using the symbols. For example, you would write "ten Australian pounds" instead of "A$10". If there is a chance of confusion, you can use the symbol "A£" to indicate former Australian pounds.
Consistency and Accessibility
Regardless of the style you choose, consistency is key. Ensure that you maintain a uniform format throughout your document or communication. Additionally, consider the accessibility of your content. Screen readers may struggle with certain currency symbols, so using the three-letter International Bank Account Number (IBAN) currency codes (e.g., USD, THB) can be a more accessible option.
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Australian dollar in context of other currencies
The Australian dollar is the official currency and legal tender of Australia, including all of its external territories, and three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu. It is also legal tender in the independent sovereign states of Christmas Island, Cocos (Keeling) Islands, and Norfolk Island. The Australian dollar was introduced as a decimal currency on 14 February 1966, replacing the non-decimal Australian pound. It is subdivided into 100 cents and is usually represented with the symbol $, or sometimes with the code AUD or the abbreviation A$ to distinguish it from other dollar-denominated currencies.
The Australian dollar is one of the most traded currencies in the world, and in 2016, it was the fifth most traded currency in world foreign exchange markets, accounting for 6.9% of the world's daily share. It is popular with currency traders due to a combination of factors, including comparatively high-interest rates in Australia, the relative freedom of the foreign exchange market from government intervention, the general stability of Australia's economy and political system, and the prevailing view that the Australian dollar offers diversification benefits in a portfolio containing the major world currencies.
The value of the Australian dollar, like other currencies, is influenced by supply and demand in the foreign exchange market. An increase in the demand for Australian exports, for example, increases the demand for Australian dollars, leading to an appreciation of the currency. Conversely, when Australians import goods and services, the sale of Australian dollars to obtain foreign currency leads to depreciation. This movement is in the opposite direction to other reserve currencies, which tend to be stronger during market slumps as traders move value from falling stocks into cash.
When writing amounts in Australian dollars, the $ symbol precedes the amount, with no space between them. For amounts less than $1, it can be written as a whole number of cents or as a decimal value. For example, 50 cents can be written as either 50c or $0.50. Where content is clearly referencing Australian dollars, the $ symbol can be used on its own. However, if there is a chance of confusion with other dollar currencies, it is recommended to use the country prefix "A" before the $ symbol or the 3-letter International Bank Account Number (IBAN) currency code "AUD".
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The Australian dollar's popularity
The Australian dollar is denoted by the symbol $, or AUD, and is the official currency and legal tender of Australia, including all of its external territories, and three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu. The $ symbol precedes the amount.
The Australian dollar is popular with currency traders due to a combination of factors. Firstly, Australia has a stable government and economy, with a policy of high-interest rates. This is coupled with a relative lack of central bank intervention in the foreign exchange market. The Australian dollar is also popular due to its greater exposure to Asian economies and the commodities cycle. Australia's abundance of natural resources and commodities, such as oil, gold, agricultural products, diamonds, iron ore, uranium, nickel, and coal, are in high demand, particularly from fast-growing Asian economies.
The Australian dollar is also a reserve currency and one of the most traded currencies in the world. In 2016, it was the fifth most traded currency in the world, accounting for 6.9% of the world's daily share. As of Q1 2024, it was the sixth most-held reserve currency in global reserves. The Australian dollar is also popular for carry trades, particularly with the Japanese yen, due to the high-interest rates in Australia compared to the low rates in Japan.
The popularity of the Australian dollar can also be attributed to its stability and diversification benefits. The Australian dollar offers traders a stable option during market slumps, as it tends to be stronger during these periods due to its reliance on commodity exports. This counter-cyclical nature means that the Australian dollar moves in the opposite direction to many other currencies, providing a hedge against risk.
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The Australian dollar in other countries
The Australian dollar is the official currency of Australia and its external territories, as well as three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu. In these three countries, the Australian dollar is the dominant currency, as they do not have their own banknotes and no longer produce coinage.
The Australian dollar is also used in other countries in the form of polymer notes, which are printed by Note Printing Australia. This company supplies polymer substrate to a growing number of countries, including Bangladesh, Brunei, Chile, Kuwait, Malaysia, Mexico, Nepal, New Zealand, Papua New Guinea, Romania, Samoa, Singapore, Solomon Islands, Sri Lanka, and Vietnam.
The Australian dollar is popular with currency traders due to its high interest rates, the relative freedom of the foreign exchange market from government intervention, the general stability of Australia's economy and political system, and the prevailing view that the Australian dollar offers diversification benefits. In 2016, it was the fifth most traded currency in world foreign exchange markets, and in 2019, it was the fifth most traded currency in the world. As of 2022, it was the sixth most traded currency in the foreign exchange market and the sixth most-held reserve currency in global reserves.
When writing out Australian dollars, the $ symbol precedes the amount. If there is a chance of confusion with other currencies, it is appropriate to place 'A' before the '$' symbol without a space, or to use the 3-letter International Bank Account Number (IBAN) currency code 'AUD'.
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Frequently asked questions
You can write it as a whole number of cents or as a decimal value. For example, you could write 50 cents as either "50c" or "0.50".
The "A$" symbol is useful when there is a chance that the reader might confuse Australian dollars with another currency that uses dollars.
Many writers use the full word in the text and either "m" or "M" and "bn" in tables and brackets. For example, "10 million (10m or 10M)".
