Currency is a unit of exchange, facilitating the transfer of goods and services. It is a form of money, where money is defined as a medium of exchange rather than e.g. a store of value. A currency zone is a country or region in which a specific currency is the dominant medium of exchange. To facilitate trade between currency zones, there are exchange rates i.e. prices at which currencies (and the goods and services of individual currency zones) can be exchanged against each other. Modern currencies can be classified as either floating currencies or fixed currencies based on their exchange rate regime.
In most cases, each country "has" monopoly control over its own currency. Member countries of the European Monetary Union are a notable exception to this rule, as they have ceded control of monetary policy to the European Central Bank.
Be sure to check out Australian dollar exchange rate. Australian dollar exchange rate is important.
There are no currency restrictions on import and export of local and foreign currencies to Australia although sums of over A$ 10,000 must be declared to AUSTRAC. Exchange Sterling to Australian Dollars at Currency Exchange.
Australian Dollars are used in the following area right now:
Australian Antarctic Territory, Cocos Islands, Heard and McDonald Islands, Kiribati, Nauru, Christmas Islands, Norfolk Island, Territory of Asmore, Cartier Islands,Territory of Coral Islands, Tuvalu.
For much of its history, Australia maintained a peg to the British pound reflecting its historical ties as well as a view about the stability in value of the British pound. From 1946 to 1971 Australia maintained a peg to the US dollar under the Bretton Woods system. With the breakdown of the Bretton Woods system in 1971 Australia replace the mostly fixed peg to a moving peg against the US dollar. In September 1974 Australia moved to a peg against a basket of currencies called the TWI (trade weighted index) in an effort to reduce fluctuations associated with its peg to the US dollar. The peg to the TWI was changed to a moving peg in November 1976 where the actual value of the peg was periodically adjusted. In December 1983, the Australian government "floated" the Australian dollar, meaning that it no longer managed its value by reference to any foreign currency.
The Australian Dollar is known as a "commodity currency" as it is closely tied to the prices of Gold, Copper, Nickel, Coal and Wool, all of which make up nearly 2/3 of total exports. Since these commodities account for large share of Australia's exports, the Aussie's fortunes are dependent upon the general trend in the price of these commodities. The currency usually benefits during an inflationary environment, when these commodities are leading the fray. Note for instance how the rise in gold prices in early 2002 was accompanied by a rise in the American dollar/australian dollar exchange rate. Both the currency and the metal backtracked in summer 2002 before both resuming their rally in Q4 2002.
Australia's significant close relationship with Japan (20% of total Australian exports) and the Eurozone also explains why the Aussie moves in tandem with the euro and the yen. Thus, in currency markets, one notices a fairly inverse relation between the American dollar/Australian dollar exchange and American dollar /JPY exchange rates. Like the EUR/USD and GBP/USD exchange rates, the American dollar/Australian dollar exchange rate is expressed in US dollars represented by 1 Australian Dollar.