Across the world, governments and central banks buy, sell, trade, and hold dollars and investments that pay in USD – such as Eurodollar bonds – to manage reserves and keep their economies afloat when things get out of hand, like the Middle East conflict. If you own dollars and their value goes up, you’re making money on that. Even if America is the world’s biggest economy, the dollar isn’t the strongest currency in the world because its stamina is measured by exchange rate, not global influence. Whether you’re sending money home to your family or running a multinational business, how much one currency is worth compared to another matters, so continue reading to discover the top 10.
Kuwaiti Dinar (KWD)
Oil and natural gas, and closer ties with the West, enabled the government to turn the tiny state of Kuwait, once a legendary phishing site, into one of the most promising digital innovation hubs in the Persian Gulf. Kuwait’s roughly 5 million citizens live a luxurious lifestyle. To prevent the weakening of the Kuwaiti dinar’s exchange rate vis-à-vis the currencies of its trading partners, authorities unpegged the dinar from the US dollar in 1975. The Central Bank of Kuwait maintains firm control over the number of dinars in circulation, which explains why the exchange rate is so high.
Bahraini Dinar (BHD)
The Bahraini dinar is the legal tender of the Middle Eastern country- and it has been ever since 1965, when it took the place of the Gulf rupee. Once under British rule, Bahrain now has the right to determine its own destiny. Bahrain was the first GCC nation, and only the third Arab country to enter into a US Free Trade agreement, which allows it to dole out its products and services without having to pay customs duties. Its oil reserves have dropped sharply, and Bahrain has understood that it can do better by developing a manufacturing industry and becoming a host for a mix of local, Islamic, and international financial institutions.
Omani Rial (OMR)
Oman’s geography varies from the rugged and mountainous terrain of the Strait of Hormuz – known by the locals as Ruus Al Jibal – in the north to the unique blend of tropical and temperate climate conditions of Dhofar, where the monsoon drives tourism and related industries. Omani cement is exported to markets in East Africa and the Indian subcontinent. Countless ships touch Oman’s shores every year, and this includes large sailing vessels with international cargo freight. The true hero of the economy? The perpetual flow of goods… It’s what makes the Omani rial stand out.
Jordanian Dinar (JOD)
When Britain finally recognized Jordan’s sovereignty in 1946, the newly independent state came up with the idea of issuing its own national currency. Before that, the Palestinian pound was used in Palestine and the Emirate of Transjordan. Everyone thinks the Jordanian dinar is the weakest currency in the world, and it’s not hard to understand why: millions of refugees live in Jordan, which places heavy strains on its resources and economy. Jordan doesn’t have sufficient energy resources for rapid development like its Gulf peers, but its national currency is pegged to the dollar, which means 1 JOD will always be worth 1 USD.
British Pound Sterling (GBP)
The British pound – aka the sterling – has performed better than the US dollar throughout much of the past decade, and much of it has to do with the beginnings of GBP/USD. The sterling entered the global markets in a position of strength, with a long history of trade (over 1,200 years), support from the Bank of England, and political stability. The dollar never really got a second chance to make a good first impression. The pound is used across England, Scotland, Wales, and Northern Ireland, and other regions historically linked to Britain, such as Saint Helena, even if they have their own notes and coins.
Gibraltar Pound (GIP)
Gibraltar’s economy thrives on tourism, financial services, gaming, and maritime activities. Its closeness to Morocco – home to one of the strongest currency in Africa – presents interesting opportunities for businesses looking to expand overseas. The British territory on the Iberian Peninsula uses the sterling alongside its own currency, the Gibraltar pound, on which citizens count on for most transactions (groceries, utilities, and more). Tourists like to take home a piece of Gibraltar, and the designs on the GIP reproduce historical landmarks – like the Moorish Castle or the Casemates Gate) and unique wildlife – think Barbary macaques.
Swiss Franc (CHF)
Swiss banks have earned a reputation for protecting clients’ assets from tax collectors, financial disaster, and changes in political favoritism. But the European country’s wealth is rooted in innovation. Switzerland doesn’t bring with startups, galloping experimentation, or groundbreaking ideas, but it’s managed to reach the top of the Global Innovation Index 15 years in a row. A country with only 0.1% of the world’s population has one of the strongest long-term currencies, and the Swiss wandering around Europe get more euros for their francs. As long as Switzerland as a business location can maintain productivity day in and day out, the franc will continue to be a safe haven.
Cayman Islands Dollar (KYD)
Behind the palm trees and crystal-clear waters lies one of the world’s most intriguing economies. The Caymans has the lowest unemployment rate of any island in the Caribbean, and at just 7.5%, the debt-to-GDP ratio is minimal compared to the much higher levels seen in Barbados, Jamaica, Bahamas, or Trinidad and Tobago. Introduced in 1972, the Cayman Island dollar replaced the Jamaican dollar at a 1:1 conversion rate. Literally all businesses accept the USD, but they give change in KYD.
Euro (EU)
21 Member States use the euro, and this includes Ireland, which still buys old Irish pound notes and coins at a fixed rate. The strength of the EU translates into the fact that the cost of imported raw materials has a softer impact on the economies of the euro zone, but it’s a serious problem for companies that generate revenues overseas. Germany has the money to give the economy a lift, so Europe has to find some way to spend it. The euro’s blast off is indeed encouraging, but the euro won’t replace the dollar as the top reserve currency anytime soon.
US Dollar (USD)
Donald Trump’s tug-of-war with trade allies and erratic policies – such as federal budget cuts – has worn down the dollar. But sitting on the sidelines and waiting for a crash isn’t an intelligent way to invest for the long haul, so a more sustainable approach is to foresee moves before they happen. The dollar has a chance to recover if government decision-making becomes more coherent and growth-friendly measures ahead of the midterm elections win back investors’ confidence.