Choosing the right currency in which we are going to place our trust is key if we want to protect our savings. Want to know the strongest currency in the world to save in?
Staying liquid in investment matters is a very important issue if we want to take advantage of the opportunities offered by the market, but in what currency is it better to keep the money? Today I bring you the 7 strongest currencies in the world to protect your money while you have liquidity and at the end I will also leave you a list with the most traded.
In countries whose currency is devalued every minute by percentages that are frightening, everyone tends to save in some other stronger currency, where in the vast majority of cases it is the dollar.
And it is indisputable, the dollar is the currency of the world. It is the most accessible and the most functional when it comes to keeping our money liquid. But it is not the only one.
There are a multitude of coins going around whose value or strength remains stable over time, but before starting to name them, I would like to briefly explain what the value or strength of a coin is.
How is the value of a coin determined?
Before the dollar was the British pound sterling, a currency that governed the world economy. The financial activity carried out by most Latin American countries, including Argentina, depended on it.
In the transit between the First and the Second World Wars, all of America came under the influence of the dollar and abandoned the pound sterling.
At that time, the strength of a currency was supported by the amount of precious metals that banks owned in each country. The classic and well known “Gold Standard ”.
That changed in the mid-1960s when central banks abandoned metals backing and switched to national reserves. The strongest was the US Federal Reserve.
The reason for the change? The speed of monetary issue and, ultimately, the regulation of the economy.
To put it in simple terms. Before each dollar was backed by Gold, today it is backed by the economic development of each country.
In this way, the value of a currency is obtained through comparison with another. This is what is known as the exchange rate.
We exchange one currency for another and from that relationship arises the value of the currency always in comparison with another. In this way, what we are really comparing is the economic strength of one country with another, and the currencies are the means to visualize it.
This all in very simple and summarized terms.
The rate or exchange rate between two currencies is the rate or proportion relationship that exists between the value of one and the other. This rate is an indicator that expresses how many units of one currency are needed to obtain one unit of the other.
Why is this important?
Because by acquiring a currency to maintain liquidity, what we are doing is really trusting the economy of that country. It is not the currency itself, but the trust we have in whoever supports the currency.
That is why it is so important that the people trust their currency, because if they do not, what they are saying is “I do not believe in the institutions of this country.”
Hence the challenge of many governments is to show signs to the market that this or that currency can be trusted.
The Strongest Currencies in the World
What is the strongest currency in the world? Here I bring you a list of the 7 most interesting currencies today so that you can place your trust. I am not going to put together this top from the cheapest to the most expensive, but from my point of view, from the least interesting to the most interesting, which is in position 1.
However, if you can maintain your liquidity in any of these 7, you are more than fine. Let’s start with the top of the strongest and most stable currencies in the world.
7. Kuwaiti Dinar
It is the most expensive currency in the world in relation to the dollar.
Kuwait is a small country with enormous wealth. The high value (rate) of its currency is explained by its significant oil exports to the global market.
Due to its stable oil-based economy, highly developed oil production and export, Kuwait is considered as one of the richest countries in the world.
In addition to the highly stable economy, Kuwait is a tax-free country with a fairly low unemployment rate.
6. Cayman Islands dollar
Who has not heard of these islands?
The Cayman Islands is one of the best global tax havens. These islands provided authority for hundreds of banks, hedge funds, and insurance companies.
Many times it is a currency that goes unnoticed but that many people with money are interested in keeping close.
5. The Japanese Yen
It had its heyday and is currently in a bit of a decline. But it continues to be widely operated even if its value with respect to the dollar is not one of the best.
Undoubtedly, the fact that a currency is operated a lot does not mean security, but it does at least make us understand that it is a country that can be trusted, even though it is doing badly economically given its good reputation.
4. Canadian Dollar
The Canadian dollar is the fifth-world reserve currency. The Canadian dollar is also called a “loonie” after the bird depicted on the $1 coin.
The stability of their institutions and their governments in general make the Canadian dollar an excellent currency.
Hated and loved by many. It is the most direct competition of the dollar.
It is the second world reserve currency and part of its solidity is explained because the euro represents the strength of many countries as a whole. As such, its economy is diversified.
2. British Pound Sterling
A very interesting coin with an indisputable economic strength.
The pound sterling is the currency of the United Kingdom as well as the Crown Dependencies and some British Overseas Territories. In its other colonial territories different currencies are used but fixed at sterling.
1. Swiss Franc
Since 1971 the Swiss country’s currency has strengthened by 350% against the US dollar.
There are many economic strengths of the country and its institutions. Legal certainty is indisputable but it also has a plus, it is the world’s safe haven currency in the event of a global crisis.
Being a country with the best legal, financial and political security. It is an indisputable destination at the slightest problem.
The level of public debt is extremely low in relation to that of the main developed regions.
Read Also: 10 Most Valued Currencies In The World
It is a very productive and diversified economy, with a lot of weight in high-value and/or avant-garde sectors such as technology, pharmaceuticals, the luxury sector, biotechnology, and cryptocurrencies.
A currency to keep in mind.
Although I already have the top, I want to make a special mention of the Australian dollar. It is a currency and therefore a country, for which I see a great future and which will soon become a power. So don’t lose sight of her.
As if to finish, I will quickly tell you which are the most traded currencies in the world today.
|New Zealand Dollar
The total is 200% because each currency is traded in pairs so graphically it is 100% times 2.