Top 10 Strongest Currencies In The World In 2023

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Top 10 Strongest Currencies In The World In2023

The U.S. dollar is generally seen as themost powerful currency in the world. It’s the most-traded currency on theglobal stage by a wide margin.

However—perhaps surprisingly—the greenbackis not the strongest of the 180-odd traditional fiat currencies recognized aslegal tender worldwide. A fiat currency is money that has a value not tied to aphysical commodity like gold or silver.

Other currencies are stronger becausethey’re worth more than a dollar. We’ve found the 10 strongest currencies inthe world, based on their relative value against the U.S. dollar.

How Is Foreign Currency Priced?

Foreign currency is traded in pairs: Youbuy U.S. dollars with British pounds, for example. As a result, one currency isalways priced relative to another currency, and this price is known as theexchange rate.

Most currencies are “floating,” meaningtheir value fluctuates depending on demand and supply. However, some currenciesare “pegged,” which means their value relative to another currency, such as thedollar, is fixed at an agreed-upon rate.

Exchange rates affect the cost of goods andservices in a foreign currency.

When the dollar strengthens against theBritish pound, American travelers can get more pounds for their dollars and areessentially able to score cheaper vacations in London. But it becomes moreexpensive for people from the United Kingdom to visit the U.S. because thepound will buy fewer dollars at a foreign currency exchange.

Exchange rates createopportunities for investors looking to profit from trading in foreigncurrencies. We’ve produced a guide explaining the basics of foreign exchangemovements.

What Are the Top 10Strongest Currencies?

We’ve determined thestrongest currencies, based on the amount of dollars needed to buy one unit ofeach currency. The exchange rates are sourced from our currency converter,based on data from Open Exchange at the time of writing.

Here are the top 10strongest currencies:

1. Kuwaiti Dinar(KWD)

The Kuwaiti dinar isthe strongest currency in the world, with 1 dinar buying 3.26 dollars (or, putanother way, $1 equals 0.31 Kuwaiti dinar).

Kuwait is located onthe Persian Gulf between Saudi Arabia and Iraq, and the country earns much ofits wealth as a leading global exporter of oil. The Kuwaiti dinar wasintroduced in the 1960s and was initially pegged to the British pound beforebeing re-pegged to an undisclosed basket of currencies.

2. Bahraini Dinar(BHD)

The Bahraini dinar isthe second-strongest currency in the world, with 1 dinar buying 2.65 dollars(or $1 equals 0.38 Bahraini dinar).

Bahrain is an islandnation in the Persian Gulf off the eastern coast of Saudi Arabia. Like Kuwait,the country earns much of its wealth from oil and gas exports. The Bahrainidinar entered circulation in 1965 and is pegged to the dollar.

3. Omani Rial (OMR)

The Omani rial is thethird-strongest currency in the world, with 1 rial buying 2.60 dollars (or $1equals 0.38 Omani rial).

Oman sits between theUnited Arab Emirates and Yemen at the eastern tip of the Arabian Peninsula. Aswith its wealthy neighbors, Oman is a major exporter of oil and gas. The Omanirial was introduced in the 1970s and is pegged to the dollar.

4. Jordanian Dinar(JOD)

The Jordanian dinaris the fourth-strongest currency in the world, with 1 dinar buying 1.41 dollars(or $1 equals 0.71 Jordanian dinar).

Jordan is a largelylandlocked country in the Middle East that is less dependent on oil and gasexports than other nations in the region. It has struggled with sluggisheconomic growth and rising debt. The Jordanian dinar entered circulation in1950 and is pegged to the dollar.

5. British Pound(GBP)

The British pound isthe fifth-strongest currency in the world, with 1 pound buying 1.22 dollars (or$1 equals 0.82 British pound).

Britain’s economy isthe world’s sixth largest by gross domestic product (GDP), according to theWorld Bank. The pound was first introduced in the 1400s before beingdecimalized in 1971. It is free-floating, not pegged to other currencies.

6. (tie) CaymanIslands Dollar (KYD)

The Cayman Islandsdollar is in a tie for sixth among the strongest currencies in the world