All merchandises sold, bought and
transacted within Australia are expressed logically in the
Australian currency: the Australia dollar (A$ or AUD).
Because there are many tourists, travelers, investors and
businessmen who are in the country to conduct trades and
purchase goods, there is a need to express and convert their
foreign currencies into the local currency.
Thus, conversions must adhere to the
rate of exchange that prevails on the transaction date.
Every day, Australia currency exchange rates vary, depending
on several factors, which include volume and reserves. The
Reserve Bank of Australia, the country’s central bank, is
responsible for consolidating and releasing statistics that
regulate and determine exchange rates.
Throughout each weekday, there is an actual currency
market that determines how much the Australian dollar will
cost when compared to other currencies.
Every day, exchange
rates vary because volume, supply and demand for the dollar
held against specific foreign currencies differs.
Thus, the Australian
exchange rate for the US dollar yesterday is most probably
different from the prevailing and closing rate today.
In general foreign exchange rates are among the main
concepts of finance. Forex rate, FX rate or currency rate
basically specifies how much a currency is worth when
compared to another. For example, an exchange rate of 103
Japanese yen to the Australian dollar means that ¥103 is
worth exactly the same as A$1. The Australian currency
market is also adhering to the foreign exchange market,
which is definitely among the biggest financial markets
globally. It is estimated that about $3.2 trillion worth of
combined world currencies are traded and are changing hands
every single day.
If you are to delve more into foreign
exchanges, you will note that there is an exchange system
quotation. Such quotes are stated in terms of the term
currency that can be acquired in terms of a unit currency or
For example, a quotation
states that the AUDUSD rate is 2.345. It means that $2.345 is equivalent to
each Australian dollar.
To avoid further confusion
among consumers, the foreign exchange market has a
market convention that identifies base currency and
Usually, the order for conversion is EUR to GBP to AUD to NZD to USD. If the conversion
will be from Australian dollar into US dollar, AUD
will definitely be the base currency and USD will be
the term currency. This particular exchange rate
tells how many US dollars should be needed to
purchase or attain each Australian dollar.
currency exchange rates are published every day. When you
check out Australian newspapers in the morning, what you
usually see is the closing exchange rate from the preceding
Currency conversion activities for this day will be
based on the closing price of Australian exchange rates
yesterday afternoon. This system is also practiced and
implemented by most other countries.