Investors in countries where the currency is devaluing by the minute, look for the best currencies to invest. Faced with such a rapid loss of value, everyone tends to save in other stronger currencies, where the vast majority of cases is the dollar.
It clearly cannot be denied that the world’s currency is the dollar. This currency 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 many currencies whose value or strength remains stable over time. For this reason, in this article we will talk about which are the best currencies to invest based on the value and strength of the currency.
Table of Contents
Value of a coin
At present, we can say that the dollar is the currency that governs the world economy. However, it was previously the British pound sterling.
The financial activity carried out by most Latin American countries depended directly on the pound, but in the transition between the First and Second World War, all of America came under the influence of the dollar and abandoned the British currency.
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”. However, in the mid-1960s, central banks abandoned their backing for metals and switched to national reserves. The strongest was the US Federal Reserve.
The reason for the change? The speed of monetary issuance and the regulation of the economy.
In simple terms. Before each dollar was backed by gold and today it is backed by the economic development of each country.
In this way, the value of a currency is obtained by comparing it with another currency. This is what is known as the exchange rate.
The exchange rate or exchange rate between two currencies is the ratio of proportion that exists in the value of one and the other. This rate serves as an indicator that expresses how many units of one currency or currency it takes to obtain one unit of the other.
When we exchange one currency for another, the value of the currency arises, but what we are really comparing is the economic strength of one country with another. Therefore, when acquiring a currency to maintain liquidity, what we are really doing is trusting the economy of that country.
Also read: Factors that affect the value of money over time
The most stable currencies in the world
What is the strongest currency in the world? What currency to trust to invest? We are going to see which are the 7 most interesting currencies or currencies in the world so that you can review them and you can place your trust in them. This tier list will show the currencies from least interesting to most interesting. However, any of these 6 currencies offer high levels of confidence.
Kuwaiti Dinar
The Kuwaiti dinar is the most expensive currency in the world using the dollar as its base currency.
Kuwait is a small country with enormous wealth. The high value or rate of its currency can be 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 regarded as one of the richest countries in the world.
In addition to its highly stable economy, Kuwait is a tax-free country with a fairly low employment rate.
Cayman Islands Dollar
Surely you have also heard about these islands through any medium.
The Cayman Islands is one of the most important tax havens in the world. 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 money people are interested in keeping in their wallets.
Japanese Yen
The Japanese yen had its heyday and is currently a bit on the wane. However, it is still operated by a large number of investors, although its value against the dollar is not one of the best.
We are clear that a currency that is operated a lot does not have to mean security, but at least, if it gives us to understand that it is a country that can be trusted even if economically it is not doing well at all. The confidence expressed by the Japanese yen is mainly due to the good reputation of the country.
Canadian dollar
The Canadian dollar is the world’s fifth largest reserve currency. The Canadian dollar is also known as a “loonie” after the bird depicted on the 1 dollar coin.
The stability of its institutions and of its governments in general, make the Canadian dollar an excellent currency for investors.
Euro
The euro is a currency hated and loved by many people. Our currency is the most direct competitor to the dollar.
The euro is the world’s second largest reserve currency and part of its strength is explained by the fact that the euro represents the strength of many countries as a whole. By this, we can understand that its economy is diversified.
Swiss franc
The Swiss franc has strengthened 350% against the US dollar since 1971.
The currency of the Swiss country reflects that there are many economic strengths of the country and its institutions. Legal certainty is indisputable, but it also has a plus, the Swiss Franc 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 in the face of the smallest problem that may arise.
The level of public indebtedness of the Swiss country is extremely low in relation to that of the main developed regions.
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 that we must take into account if we are investors.
Bottom line
Before concluding with our tier list, we could make a special mention of a currency that should not be neglected, the Australian dollar.
The Australian dollar is a currency, in the same way a country, that has a future ahead of it and that will soon become a good power. We must keep it present in our investments.
Knowing the characteristics of financial markets, and their components, is the most valuable asset we can have. In this way, we will know better where to place our investments and avoid scams and deceptions within the system.
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