Article by Currency Information and Research

Investing in the "Aussie" Australian Dollar

Australia is a democratic country with a population of around 21,515,754 and it is the sixth largest country in the world. The capital of Australia is Canberra and the currency used in Australia is known as the Australian dollar. The Australian dollar is sometimes called an Aussie and it is represented as AUD, $ or A$.

1 Australian dollar = 1.0149 U.S. dollars (at time of article)

Lets see an overview of Australia and its currency.

The first inhabitants of Australia were called Aborigines and there were around half a million Aborigines at the time of the European settlement. After the progression into the 1800’s they formed six colonies in Australia named New South Wales, Tasmania, Western Australia, South Australia, Victoria, and Queensland. These colonies then became states and have been federated as the Commonwealth of Australia. The currency came into the act in 1965 which was put forth by the Prime Minister with the name as “the royal.”

This currency didn’t acquire its popularity in the foreign exchange market and soon got replaced with the Australian dollar. The Australian Reserve Bank started to issue the Australian dollar notes as $10, $20, $50 and $100 in 1980’s and the $1 & $2 have since been replaced as coins (cents) instead of notes.

The present situation of this currency in comparing with the US dollars is relatively high due to the increased interest rates in Australia. This has made the Australian dollar ranked fifth in the world’s most traded currency by value. Most of the traders are now looking to invest in the Australian dollar as it has risen in value significantly and it is predicted to reach as much as $1.70 by 2014.

Certain analysis have been made on the Australian dollar and it has been grouped down below as to why to invest in the Australian dollar.

  • The inflation rate of Australia is 3.3% which is relatively low compared with other countries.
  • Australia has a high interest rate of 7% which has made the Australian dollar overtake the value of the US dollar
  • In the future the interest rates are proposed to be higher; in that case the value of the Australian dollar can reach higher than expected.
  • Australia is strong in material importers in Asia and especially in China. So the change of prices in those commodities can affect the Australian dollar. There is a probability of the prices to increase in future,

A few days ago it has been set forth that the Australian dollar was being traded at 99.41 US cents, relatively up from 99.24 cents. And now the rate of the Australian dollar has increased and paved the way for investors to have the confidence to invest in the Australian dollar. Europe’s debt crisis has led the European Central Bank (ECB) to lend billions of Euros from several banks to increase their capital. This has led to the increase of value in the Australian dollar and it is now the right time to invest in the Australian dollar if you’re looking to gain profit.

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