What Are They?
The Australian Dollar, the Australian New Zealand Dollar and the New Zealand Dollar are called the AUDUSD, the British Pound, British New Zealand Dollar and the US Dollar respectively. But there is no single currency for each country. The currency of each country is to be compared as being a sister of the other.
All three of them were once exchange currencies; but only the USD was a free currency and it has not been a fiat currency. The AUDUSD, the British Pound and the New Zealand Dollar are all equal in value.
The former two (AUDUSD and USDCAD) belong to the so-called “european nations”. The UK was also part of the European Community and it has its own currency, the Pound.
The three currencies were established in order to compete against the others in terms of the kind of market they are used for, however, in reality they are still all for different reasons. These three have a big advantage over each other when it comes to their flexibility and adaptability.
The most flexible one is the AUDUSD. This currency has an infinite level of fluctuations and the range of its value depends on the conditions prevailing within each country. It can go up or down up to four per cent in one day.
The other two currencies are quite stable and have daily fluctuations of only around two per cent. The USDCAD has its daily fluctuations of two per cent. This currency also has an infinite level of fluctuation and it can change of up to four per cent on a daily basis.
However, for many years these currencies were traded by countries belonging to the so-called “european nations”. Since then they have gained popularity in Asia and with time many countries of Asia have added the currencies of these countries as part of their existing economies.
However, with the passage of time they lost popularity and because of the current economic conditions have become more scarce than before. But they still have many users in the Asian region. Because of this, in Asian countries some countries use these currencies as the main or reserve currency.
Another way of using this currency is in New York or London or Singapore. In Asian countries these currencies are used as the reserves for the state. Therefore they do not try to print more of them.
The governments of these countries are in need of funds to pay for public expenses and in case of recession they try to use this currency as the reserve currency. However, they still have a limited amount of them and they depend on the commodity prices as the real support of their currencies.
In Europe, the use of these currencies are not unlimited but they can be used when there is a very high demand for them. It is the only real option they have in order to maintain their financial status.