Did you know that over 180 currencies from around the world are recognized by the UN?
There are several factors that influence the value of a currency. Not only are there a number of country-specific variables that go into determining a currency’s strength, but there are also other benchmarks (other currencies, commodities, etc) against which a currency’s strength can be measured.
Although one economy may be stronger than another, it’s important to note that this doesn’t necessarily indicate a stronger currency. For example, Japan’s economy is regarded as one of the world’s strongest. Yet, a single Japanese yen exchanges for considerably less than one US dollar.
Countries all over the world purchase other currencies, and this can contribute to fluctuations in a currency’s value. For example, the US dollar is strong because so many countries buy this currency. If investors and buyers were to stop buying US dollars, its value would drop significantly.
Here’s a list of the world’s 10 strongest currencies as valued against the world’s most traded currency – the US dollar (USD).
*Exchange rates were sourced from Google Finance at the time of publication on June 1st, 2019.
Interested in the flip side? Check out the World’s Weakest Currencies (2019).
#1 Kuwaiti Dinar [1 KWD = 3.29 USD]
Kuwait is a small nation located at the tip of the Persian Gulf. Despite its size, Kuwait’s significant oil exports into the global market have made it a very wealthy country. As a result, the Kuwaiti dinar is the world’s highest-valued currency.
#2 Bahraini Dinar [1 BHD = 2.65 USD]
Bahrain is an island state in the Persian Gulf and it is home to the world’s second strongest currency. The country’s largest source of income comes from their export of petroleum products.
#3 Omani Rial [1 OMR = 2.60 USD]
Oman is located on the southeastern coast of the Arabian Peninsula. It is another big exporter of petroleum resources. The Omani rial has been pegged to the US dollar for decades (because oil is valued in US dollars), so the currency has remained stable relative to the price of oil.
#4 Jordanian Dinar [1 JOD = 1.41 USD]
Jordan is not economically developed, and it lacks essential resources such as oil. So why is its currency so strong? Because it’s also been pegged to the US dollar for the last 20 years. Neither the Jordanian government nor its central bank has any intention of playing with the dinar’s exchange rate, so it appears that the connection between the dinar and US dollar is here to stay.
#5 Pound Sterling [1 GBP = 1.26 USD]
The pound sterling is the official currency of the United Kingdom and some of its crown dependencies and overseas territories. In recent years, its value has been negatively affected by the UK’s decision to leave the EU.
#6 Cayman Islands Dollar [1 KYD = 1.20 USD]
The Cayman Islands has a strong currency, as it’s one of the world’s best tax havens. This island nation provides offshore banking licences for hundreds of banks, hedge funds and insurance companies.
#7 Euro [1 EUR = 1.12 USD]
The euro is the official currency of the European Union, and the world’s second biggest reserve currency. It’s now the official currency of 19 of the 28 EU member countries, as well as some countries that are not formally members of the EU.
#8 Swiss Franc [1 CHF = 1 USD]
The official currency of Switzerland is both the world’s eighth strongest and eighth most commonly-held reserve currency. Switzerland’s sound monetary policies and low debt levels have made the Swiss Franc a ‘safe-haven’ currency.
#9 US Dollar (USD)
The US dollar is the world’s most traded currency, and it’s also the world’s primary reserve currency. It’s held by both central and commercial banks all around the world for the purpose of international transactions.
#10 Canadian Dollar [1 CAD = .74 USD]
The Canadian dollar is the sixth most traded globally and the world’s fifth largest reserve currency. Canada’s natural resources rank third in value worldwide, mainly thanks to the country holding the third largest reserves of crude oil and the second biggest uranium supply on the planet. The Canadian dollar’s value is quite sensitive to changes and fluctuations in the value of the US dollar.
Want to see which currencies are on the up? Check out World’s Most Improved Currencies 2019.
Exchange rates are constantly fluctuating, mainly thanks to the world’s ever changing economic and political situations. As a result, it’s hard for some currencies to remain in the top 10. Some currencies that have recently fallen out of the top 10 ranking include the Australian dollar and the Libyan dinar.