The Australian dollar (AUD) is currently the fifth-most-traded currency in world foreign exchange markets behind the US dollar, the euro, the Japanese yen and the UK pound sterling.
The Australian dollar is popular with currency traders due to Australia's comparatively high interest rates, the relative freedom of the foreign exchange market from government intervention, Australia's relative economic and political stability, and the prevailing view that the Australian dollar offers diversification benefits in a portfolio containing major world currencies - owing to its greater exposure to Asian economies and the commodities cycle.
This is particularly momentous against the backdrop of a declining US Dollar. Looking back only nine years, the Aussie Dollar was trading at an all-time low against the "greenback", at approximately 49 cents.
By contrast, Australia's currency reached an historic parity with the US currency in November of 2010, frequently oputperforming the USD during 2011, with many leading economists predicting this stellar performance to continue well into the foreseeable future.
