Leslie Massey
The Australian dollar (AUD) is the official currency of Australia and its external territories, including Christmas Island, Cocos (Keeling) Islands, and Norfolk Island. It is also the official currency of three independent Pacific Island states: Kiribati, Nauru, and Tuvalu. The Australian dollar was introduced in 1966 to replace the Australian pound, with a conversion rate of two dollars to the pound. It is often referred to as the Aussie dollar and is known for its stability and high interest rates, making it popular among currency traders.
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What You'll Learn
Australian dollar exchange rates
The Australian dollar (AUD) is the official currency and legal tender of Australia, as well as its external territories: Christmas Island, Cocos (Keeling) Islands, Norfolk Island, and three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu. It is also legal tender in a number of other Pacific Island states.
The Australian dollar was introduced in 1966 to replace the non-decimal Australian pound, with a conversion rate of two dollars to the pound. It is subdivided into 100 cents. The $ symbol is used to denote the amount in Australian dollars, and it is often abbreviated as A$ or AU$ to distinguish it from other dollar-denominated currencies.
The Australian dollar is the sixth most-traded currency in the foreign exchange market, and it is popular with currency traders due to a number of factors. These include Australia's comparatively high-interest rates, the stability of its economy and political system, and the view that the Australian dollar offers diversification benefits, particularly due to its exposure to Asian economies and the commodities cycle.
As of April 2025, the exchange rate for the Australian dollar against other currencies is as follows:
- 1 USD = 1.56254 AUD
- 1 AUD = 0.806942 EUR
- 1 AUD = 0.719154 GBP
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Australian dollar coins
The Australian dollar coins were introduced on 14 February 1966, though this did not include the one-dollar or two-dollar coins. The dollar was equivalent in value to 10 shillings (half a pound) in the former currency. The Royal Australian Mint is the sole producer of circulating coins in Australia today. Before the opening of the Royal Australian Mint, Australian silver coins were minted solely from the Perth Mint, which is now Australia's official bullion mint.
The one-dollar coin was introduced on 14 May 1984 to replace the banknote of the same value. The two-dollar coin was introduced in 1988, also replacing a banknote. Both the one-dollar and two-dollar coins are a gold colour, though they are not actually made of gold. Instead, they are made from metals such as copper, aluminium, and nickel. The two-dollar coin is smaller in diameter than the one-dollar coin, but it is slightly thicker.
The "silver" 5c, 10c, and 20c coins can be counted by value using their weight, without the need to count the individual pieces, as they have the same weight per value. The original 50c coin was circular and contained 80% silver and 20% copper, but it was withdrawn from circulation after one year because the metal in the coin quickly became worth more than 50c, and to avoid confusion with the 20c coin. The 50c coin was then issued in a dodecagonal (12-sided) shape starting in 1969.
The Royal Australian Mint regularly releases collectible coins, which are all legal tender and can be used directly as currency or converted to "normal" coinage at a bank. One of the most famous of these is the 1980–1994 gold two-hundred-dollar coin series. Nugget coins are issued in troy ounces and fractions or kilograms and come in gold and platinum, some denominated in dollars, and others by their weight value.
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Australian dollar banknotes
The Australian dollar (AUD) was established in 1966 for use in Australia and all of its territories. It is divided into 100 cents and consists of five denominations of banknotes and eight coins. The Australian dollar is also legal tender in the independent sovereign states of Kiribati, Nauru, and Tuvalu.
The first paper issues of the Australian dollar were introduced in 1966. The $1, $2, $10, and $20 notes had exact equivalents in the former pound notes. The $5 note was issued a year later, in 1967, followed by the $50 note in 1973, and the $100 note in 1984. The $1 and $2 notes were replaced by coins in 1984 and 1988, respectively. Although no longer in print, all previous notes of the Australian dollar remain legal tender.
In 1988, the Reserve Bank of Australia issued the world's first polymer banknote, the $10 note, to commemorate the bicentenary of European settlement in Australia. This note featured a transparent "window" with a diffractive optically variable device (DOVD) image of Captain James Cook as a security measure. All current Australian notes are now made of polymer and include microprinting for security.
The obverse of each banknote of the current series, dubbed "Next Generation", features influential Australian figures and icons. These include Banjo Paterson, Mary Reibey, David Unaipon, Nellie Melba, Mary Gilmore, John Flynn, Edith Cowan, and John Monash. The $5 note features Queen Elizabeth II and the Parliament House. Following the Queen's death, the government announced that the $5 note would be replaced with an Indigenous design.
The latest Australian banknotes were released between 2016 and 2020, with new versions of the $5, $10, $20, $50, and $100 notes. These upgraded banknotes include tactile features like Braille dots to assist visually impaired individuals.
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Australian dollar's popularity with currency traders
The Australian dollar is popular with currency traders due to a combination of factors, including its unique relationship with the Japanese yen, its floating exchange rate, and its status as a reserve currency.
One of the key attractions of the Australian dollar for traders is its high interest rates compared to other countries. This makes it a popular alternative for traders looking to go long on commodity exposure and/or Asian resource demand. The Australian dollar is also influenced by the country's heavy reliance on commodities, such as metals, coal, diamonds, meat, and wool, which account for a large share of Australia's exports. As a result, the Australian dollar is often referred to as a "commodity currency", with its value closely tied to the prices of these commodities. For example, during the commodity slump of 2015, the Australian dollar weakened sharply against the US dollar.
The relative freedom of the Australian foreign exchange market from government intervention is another factor in the popularity of the Australian dollar. The market is dominated by major banks, trading houses, and funds, which quickly incorporate any new information into the price. This dynamic nature of the market makes it attractive to traders who can respond swiftly to changing conditions.
Additionally, the general stability of Australia's economy and political system contributes to the popularity of its currency. Australia is a wealthy country, and its dollar is among the top five most frequently traded currencies in the world. In April 2022, it was the sixth most-traded currency in the foreign exchange market, highlighting its importance in global trade.
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Australian dollar's value
The Australian dollar (AUD) is the official currency and legal tender of Australia, as well as its external territories: Christmas Island, Cocos (Keeling) Islands, Norfolk Island, and three independent Pacific Island states: Kiribati, Nauru, and Tuvalu. It is also legal tender in Papua New Guinea and the Solomon Islands until 1975 and 1977, respectively, before being replaced by other currencies.
The Australian dollar was introduced as a decimal currency on 14 February 1966, replacing the non-decimal Australian pound. The conversion rate was set at two dollars to the pound. The $ symbol is used to denote the Australian dollar, with the amount preceded by the symbol. The currency is further abbreviated as A$ or AU$ to distinguish it from other dollar-denominated currencies.
The Royal Australian Mint is renowned for producing high-quality numismatic coins. It has issued several commemorative 50-cent coins, including one commemorating James Cook's exploration of the Australian continent's east coast and another for Queen Elizabeth II's Silver Jubilee. The mint has also produced triangular coins, such as the one introduced in 2013 to mark the 25th anniversary of the opening of Parliament House.
The Australian dollar is the sixth-most traded currency in the foreign exchange market as of April 2022 and the sixth-most-held reserve currency in global reserves as of Q1 2024. Its popularity among currency traders stems from several factors, including Australia's relatively high-interest rates, the stability of its economy and political system, and its exposure to Asian economies and the commodities sector. The Australian dollar's value is particularly sensitive to changes in commodity prices, which can cause it to rally during global booms when Australia exports raw materials and fall during recessions or downturns.
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Frequently asked questions
The Australian dollar (AUD) is the official currency and legal tender of Australia, including its external territories, and three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu.
The symbol for the Australian dollar is the dollar sign ($), and it is also abbreviated as A$ or sometimes AU$ to distinguish it from other dollar-denominated currencies.
The Australian dollar was introduced as a decimal currency on 14 February 1966, replacing the non-decimal Australian pound. The $1, $2, $10, and $20 notes were issued in 1966, followed by the $5 note in 1967, the $50 in 1973, and the $100 in 1984.
