The Australian Dollar was introduced in February 1966 and has been through nearly every stage of currency evolution possible: a peg to gold, a peg to sterling, a peg to the US dollar, a peg to a basket of currencies and a moving peg. All these fixed solutions to valuing the Aussie dollar were unsuccessful, and the economy was extremely unstable.
In 1983, the Australian Dollar finally became a free-floating currency, when the government – led by Bob Hawke – decided to abolish restrictions on the international movement of capital. The decision was a crucial part of opening Australia’s economy.
At the time of its floatation, most investment in Australian markets were small domestic banks and companies. But once the AUD was free floating, foreign banks entered the market and boosted the Aussie Dollar to the actively traded currency we see today.