In recent years, the global economic recovery has been slow, the international situation has become unstable, and the market has fluctuated significantly. Many currencies have experienced unpredictable depreciation, passively or actively. Whenever people talk about the most valuable and powerful currencies in the world, the first thing that comes to mind is likely to be the US dollar, the Euro or the British Pound. However, the reality may be far beyond your expectations. Although the U.S. dollar is the most traded and widely used currency in the world, it is not the most valuable.

Seven major factors that affect currency strength:

Inflation rate: If a country’s inflation rate is low, then that country’s currency is strong.
Interest rates: Currencies of countries with higher interest rates strengthen because lenders benefit more and foreign currencies are attracted.
Economic and political environment: Countries with stable economic and political environments attract investors, and the flow of funds will in turn affect the country's currency exchange rate.
Monetary policy: A country with a sound monetary policy will reduce its currency supply, causing its currency to appreciate.
Tax rates: Tax-free countries, or countries with lower tax rates and providing tax benefits to investors and businesses, tend to attract more foreign investment, leading to a strengthening of their currencies.
Resources: Countries such as Saudi Arabia that produce crude oil and export natural gas and petroleum products typically have strong currencies. This is because crude oil is priced in U.S. dollars, and when oil prices rise, demand for U.S. dollars increases, making the currency stronger.
Banking system: The strength and stability of a country's banking system will also have an impact on the country's currency. Countries with well-regulated and stable banking systems (e.g., Switzerland) tend to have strong currencies because investors have confidence in their financial institutions.

A country's economic growth rate can have a significant impact on its currency exchange rate. Investors tend to be more optimistic about emerging market countries, which attract foreign investment and cause their currencies to strengthen. However, if a country's economy is in trouble or shrinking, investors may be less willing to invest in it, causing the country's currency to depreciate.

No.10: Canadian dollar (CAD)

The Canadian dollar is the official currency of Canada, the sixth most traded currency in the world, and is also included in the list of the most traded currencies in the world. Canada's natural resources rank third in the world, thanks to the country's vast oil reserves and the second-largest uranium deposits (both located in Alberta). The Canadian dollar is particularly susceptible to fluctuations in the value of the U.S. dollar because Canada conducts the vast majority of its trade in U.S. dollars.

1.36 CAD= 1 USD

No.9: U.S. dollar (USD)

As the world's common currency, the U.S. dollar is the most widely traded currency in the world and occupies the status of the major reserve currency. However, the US dollar is not the most valuable currency.

No.8: Euro (EUR)

The euro is the official currency of the Eurozone, which consists of the 19 member states of the European Union. The euro is the world's second-largest reserve currency and second-largest traded currency.

1 euro = 1.08 US dollars

No.7: Swiss franc (CHF)

The Swiss franc (CHF) is the currency of Switzerland and Liechtenstein. Switzerland has a stable and sound banking system, and the world-famous Swiss Bank has a strong regulatory system, making its currency stable and high in value.

1 Swiss franc =1.11 US dollars

No.6: Cayman Islands dollar (KYD)

In the 1970s, the exchange rate for the Cayman Islands dollar (KYD) was fixed at 1 KYD equal to US$1.20. The Cayman Islands dollar's exchange rate is largely supported by the country's status as a tax haven for the wealthy.

1 KYD = 1.20 USD

No.5: British Pound (GBP)

The United Kingdom uses the pound sterling (GBP), which is also widely used in other countries. As the fifth largest currency in the world, the British pound is of great significance in global finance. London's status as a financial center and the UK's extensive trade activities have contributed to the strength of the pound.

1 GBP = 1.27980 USD

No.4: Jordanian dinar (JOD)

The Jordanian dinar (JOD) has been the currency of Jordan since 1950, when it replaced the Palestinian pound. Jordan's fixed exchange rate and diversified economy keep its currency highly valued, ranking it the fourth largest currency in the world.

1 JOD = 1.41 USD

No.3: Omani Rial (OMR)

The Omani Rial (OMR) is the currency of Oman, introduced after the country stopped using the Indian Rupee as its official currency. As a country with large oil reserves, Oman's economy relies heavily on the oil sector. The Omani rial, which is pegged to the U.S. dollar, is the world's third most valuable currency.

1 OMR = 2.60 USD

No.2: Bahraini dinar (BHD)

The Bahraini dinar (BHD) is the currency of Bahrain, an island nation in the Arabian Gulf that relies heavily on oil exports. The BHD is pegged to the US dollar and is used only in Bahrain. Bahrain has a strong expat community, including a large Indian population, and has the second-strongest currency in the world.

1 BHD = 2.65 USD

No.1: Kuwaiti Dinar (KWD)

The most valuable currency in the world is the Kuwaiti Dinar (KWD). Since its first introduction in 1960, the Kuwaiti dinar has been ranked as the most valuable currency in the world. Kuwait's economic stability is due to its oil reserves and tax-free regime, which results in strong demand for its currency.

1 KWD = 3.27 USD

Find us on Twitter, Instagram, YouTube, and TikTok for frequent updates on all things investing.

Have a financial topic you would like to discuss? Head over to the uSMART Community to share your thoughts and insights about the market! Click the picture below to download and explore uSMART app！

Important Notice and Disclaimer:

This document is prepared by uSMART. This document is not intended for or directed at persons under local laws or regulations that prohibit the distribution or publication of this document. This document is provided to the recipient only, and the information, materials, or analytical tools contained herein are provided to the recipient for informational and reference purposes only. This document should not be construed in any jurisdiction as constituting an offer, solicitation, recommendation, inducement, endorsement, opinion, or guarantee to purchase, sell, or trade any securities, financial products, or instruments or to engage in any investment or any transaction of any kind, nor is there any intention to solicit or invite the purchase or sale of any securities.

Investment involves risks. Before making investment decisions, the recipient should carefully read relevant offering documents to obtain further information, including risk factors. Past performance data does not imply similar future performance. Investments in the asset categories mentioned in this document may not be suitable for all recipients. This document does not consider the individual objectives, financial situation, or needs of any specific person who may access this document. Before engaging in any transactions, the recipient should take reasonable actions based on personal objectives and circumstances to ensure a clear understanding of the transaction and independently evaluate the suitability of the transaction, including assessing the potential risks and returns of the transaction, and if necessary, seek independent professional advice. The information and opinions contained in this document reflect the judgment of uSMART as of its publication date, and no further notice will be given in the event of changes. Neither we or our respective directors, officers or employees will be responsible for any losses or damages which any person may suffer or incur as a result of relying upon anything stated or omitted from this article.

The value of these securities and the income from them may fall or rise. Your investment is subject to investment risk, including loss of income and capital invested. Past performance figures as well as any projection or forecast used in this article is not indicative of its future performance.

This advertisement has not been reviewed by the Monetary Authority of Singapore.