The rise of digital technology, combined with globalization, has resulted in faster economic growth around the world. People now have greater access to a broader range of trading and investment options.
Currency trading, also known as foreign exchange (FOREX), is a traditional option that many traders prefer due to its convenience and accessibility. It involves trading two or more different currencies to earn from their values.
Because currency values fluctuate all the time, this type of investment can be risky. But if you want to give it a shot, here are the top five strongest currencies in the world as of December 2021.
Number 5: British Pound Sterling (GBP) 1 GBP = 1.36 USD 1 GBP = 1.72 CAD
Currently valued at 1.36 USD, United Kingdom's currency has always been on the list of the most valuable currency. One of the reasons is England's economic and social stability. The pound sterling is one of the oldest currencies globally, and it is still performing remarkably in the market today.
The United Kingdom also has huge domestic investment and a productive population. There is a high demand for their products, including precious minerals, machinery, and pharmaceuticals, making the pound sterling an in-demand currency.
Overall, the UK's reputation and influence play an important role in the currency's standing. With the people trusting them as a nation, investors are more likely to demand their currency. However, because the United Kingdom's currency has been unstable since its exit from the European Union, some traders have begun closely monitoring its currency's value.
Number 4: Jordanian Dinar (JOD)
1 JOD = 1.41 USD 1 JOD = 1.79 CAD
The official currency of Jordan is one of the world's highest currencies because of its fixed exchange rate. A fixed exchange rate is a policy that sets the value of a country's currency at a specific rate. For instance, the Jordanian dinar is set at 1 Jordanian Dinar = 1.4101 US Dollar. This means that the Jordanian dinar cannot exceed or drop below that rate. Thus, it is easier for the Jordanian government to maintain its value.
Also, compared to other Arab nations, it does not depend on oil trades. So the erratic movement of oil prices does not really affect them, and the government is more in control of the Jordanian economy.
However, the downside is the high oil prices they must pay for importing oil. As a result, outstanding economic management is critical to the Jordanian dinar's stability.
Number 3: Omani Rial (OMR)
1 OMR = 2.60 USD 1 OMR = 3.30 CAD
Omani rial is also one of the highest currencies in the world. Unlike Jordan, Oman's economy is greatly reliant on its oil exports. As one of the top oil suppliers worldwide, Oman has established itself as one of the top dollar-earning countries and in-demand currencies.
They also secure a stable amount of US dollar reserves; that's why the Omani rial has maintained its value at 2 USD for almost five decades. And despite a bit of instability of reserves in FOREX, Oman's vast sources of wealth ensure to defend its currency value if needed.
Number 2: Bahraini Dinar (BHD) 1. 1 BHD = 2.65 USD 1 BHD = 3.37 CAD
Situated in the Arab region, Bahrain is also one of the top oil suppliers in the world. And because oil demand is consistently high, so is their currency. Also, aside from oil, Bahrain has established tourism as one of its top economic drivers. Having been able to develop more sources of wealth, Bahrain became less threatened by the changes in the oil prices.
And just like Jordan, Bahrain also has a fixed exchange rate pegged at approximately 0.38 BHD per 1 USD. Because of that, the Bahraini dinar is not much affected by the changes in supply and demand.
However, Bahrain's FOREX reserve is considerably weak. Last year, it touched its lowest value in fifteen years, so it's also important to have a close watch when investing in Bahraini dinar.
Number 1: Kuwaiti Dinar (KWD)
1 KWD = 3.30 USD 1 KWD = 4.20 CAD
The Kuwaiti dinar is considered to be the most expensive currency. At a value of 3.30 USD per 1 KWD, it is only fair that Kuwaiti dinar is at the number 1 spot on our list. One reason is that Kuwait owns about 9% of the oil reserves in the world. Because of this, there is a very high demand for Kuwaiti dinar to purchase oil.
Another thing is that the Kuwaiti government does not impose taxes on its income-earning citizens. They take taxes from corporations and businesses; that's why the currency stays high, and it's the strongest currency in the world. All in all, Kuwait's economic policy, natural resources, and stability are the reasons why it's one of the most sought-after currencies in the market.
A quick rundown of the world's five strongest currencies as of December 2021:
Kuwaiti Dinar (1 KWD = 3.30 USD) Bahraini Dinar (1 BHD = 2.65 USD) Omani Rial (1 OMR = 2.60 USD) Jordanian Dinar (1 JOD = 1.41 USD) Pound Sterling (1 GBP = 1.36 USD)
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