What is the 'AUD (Australian Dollar)'
The AUD (Australian Dollar) is the currency abbreviation for the Australian dollar (AUD), the currency for the Commonwealth of Australia. The Australian dollar is made up of 100 cents and is often presented with the symbol $, A$, or AU$. The Australian dollar is also the currency for Pacific Island states of Nauru, Tuvalu and Kiribati.
BREAKING DOWN 'AUD (Australian Dollar)'
The Australian dollar was first seen on February 14, 1966, when it replaced the Australian pound. At this time, it was pegged to the Great Britain pound sterling at 2.5 dollars to one pound. In 1967, Australia abandoned the sterling peg and pegged to the U.S. dollar at .8929 Australian dollars to one U.S. dollar. In 1976, it became a moving peg to a trade-weighted index, and in December of 1983, the Australian dollar was allowed to float.
The Australian dollar is a highly traded currency and as of 2008, ranked sixth in the world according to worldwide foreign exchange transactions, accounting for approximately 4-5% of trade. The high trading is due to high interest rates in Australia and a relatively stable government, which has limited intervention in the foreign exchange market.