Currency

The Australian dollar, denoted by AUD or A$, is the official currency of the Commonwealth of Australia (including the Australian Antarctic Territory, Christmas Island, Cocos Islands, Heard Island and Mc Donald Islands as well as the independent Pacific island states of Kiribati, Nauru and Tuvalu). The AUD is sometimes called the "Aussie" and locally, the "Pacific Peso."

The AUD is the sixth most traded currency in the foreign exchange markets, trailing behind the United States dollar, Japanese yen, euro, British pound sterling and Canadian dollar. Accounting for approximately 5% of worldwide foreign exchange transactions, the AUD is popular among currency traders because of the nation's relative lack of government intervention in the FX market. Additionally, the economy and government are rather stable and the AUD seems to offer diversification benefits in a portfolio containing the major world currencies (for reasons such as greater exposure to Asian economies and the commodities cycle, for example).

Each Australian dollar can be broken down into 100 cents. The smallest coin circulating (as of mid-2005) is equal to five cents; one and two cent coins were discontinued in the early 90s and withdrawn from circulation. Cash transactions are rounded up or down to the nearest multiple of five cents.