In a way to distinguish the Australian dollar from the other dollar currencies A$ or AU$ is used to denote the AUD.

The duodecimal Australian pound was the official currency Until 14 February 1966, when the Australian Dollar was introduced.  Then, the exchange value pegged to the sterling silver at the rate of 2 AUD per British Pound; however, sterling depreciated in 1967 against the USD therefore AUD left the sterling era then. The AUD shifted its peg to the USD at the same rate of 1 AUD = 1.12 USD.

Since 9 December 1983, the Australian Labor government "floated" the Australian dollar, the exchange rate movements if AUD reflected the credits and debits in the balance of payments. The terms of trade did not determine the value of the dollar; however, it is a major part of the balance of payments.

The currency's high volatility, currency exposure and interest swap caused the Australian dollar to be pretty popular with currency traders.

The first paper currencies of Australian dollars were issued in 1966 and the polypropylene polymer banknotes are in circulation since 1988.