November already? Are you sure? Today, we’re going to have a look at some of the heroes and zeros of currency in 2021. Once done, we’ll give you our usual run-down of the top fundamental events to watch out for this week.
NB: All prices mentioned were correct at the time of writing.
Top 3 currencies in the world
We know what you’re thinking, this is an obvious list. US dollar (USD), Pound Sterling (GBP), the Euro (EUR). But no. Those are some of the most powerful currencies in the world. USD and EUR are the two most-traded currencies, so they always rank highly. But they’re far from the most valuable right now.
#1 Kuwaiti dinar (KWD)
1 KWD = 3.31553 USD
Introduced in 1960, the Kuwaiti dinar is the world’s strongest currency right now. Driven by Kuwait’s large reserves and exports of oil. About 9% of the world’s global oil reserves are located in Kuwait.
KWD has had a good 12 months, boosting its value against the dollar by 1.4%.
#2 Bahraini Dinar (BHD)
1 BHD = 2.65957 USD
The second strongest currency in the world is the Bahrain dinar or BHD. Like many Arabic currencies, it is divided into 1,000 smaller currency units, in this case, called ‘fils’.
The Bahraini dinar is only used in Bahrain and is pegged against the US dollar, so there’s no fancy chart to show you here. Sorry.
#3 Omani Rial (OMR)
1 OMR = 2.60078 USD
The Omani Rial’s value is tied to oil production. The note has become so valuable that the government had to issue notes worth 1/4 and 1/2 a rial.
Like its bahraini cousin, the Omani dinar is not an international currency, so it’s value is pegged against the US dollar. Again, apologies for lack of fanciness below — there’s just not much value in a flat chart…
The 3 cheapest currencies in the world
Small disclaimer at this point — it’s pretty tough to put these struggling currencies into order as the global landscape is frequently changing. Generally speaking, these 3 are the lowest value currencies in the world, just not necessarily in this order.
#1 Venezuelan Sovereign Bolívar (VES)
1 USD = 4.37503 VES
The bolívar has suffered massively since the outbreak of COVID-19, as hyperinflation gripped the Venezuelan economy. But it’s not just the pandemic that’s at fault.
A redenomination of the old VEF was carried out in August 2018. This was done to combat hyperinflation levels which had risen to a monumental 830,000%! That’s a lot of zeroes. Before the redenomination, 1 USD would have bought you around 248,500 VEF!
If you’re wondering about that drop-off last month, it was due to the Venezuelan government chopping six zeroes off the currency. Prior to that, a single USD would have bought you 4,217,080 VES — making you a quadruple-millionaire!
#2 Iranian Rial (IRR)
1 USD = 42,025.3 IRR
The Iranian Rial’s tumbling value began way back in 1979, after the islamic revolution in the country, as the resulting instability pushed many companies out of the country.
Next up was the Iran-Iraq War, which again stifled the currency and national economy, devaluing the IRR by around 400%.
The 2015 nuclear deal, signed with the US and leading EU nations, helped to stabilise the country and national economy. That all reversed in 2018 when the US claimed the Iranian nuclear programme was still in operation and decided to impose crippling sanctions on the country.
Crucially, the new sanctions prohibited the sale of Iranian petroleum, which made up 69% of all Iranian exports. As a result, inflation rose by 600%. Not so good.
#3 Vietnamese Dong (VND)
1 USD = 22,759.5 VND
The Vietnamese Dong completes our mini-list of failing currencies.
There are a number of reasons behind the currency’s low value, chief among them being that the country only entered the global market back in the 1980s, which is relatively recently compared to other Asian economies.
There’s also quite a lot of government control going on, which leads to bureaucratic corruption, favouring those who are in control. This government also continues to print money, thus devaluing the VND even further.
The private sector also accounts for more than 50% of the economy, which means it struggles to receive investments.
What do you think of our list?
Did we miss anything? What’s your favourite and/or least favourite currency and why? Let us know at @_Contentworks!
Top trading events week commencing 01/01/21
There’s a fair bit going on this week, here’s when and where you need to tune in.
● USD — Markit Manufacturing PMI Final (OCT); ISM Manufacturing PMI (OCT)
● AUD — RBA Interest Rate Decision
● NZD — Employment Change QoQ (Q3); Unemployment Rate (Q3)
● USD — Fed Interest Rate Decision; Fed Press Conference
● GBP — BoE Interest Rate Decision
● CAD — Balance of Trade (SEP)
● AUD — RBA Statement on Monetary Policy
● CAD — Employment Change (OCT); Unemployment Rate (OCT)
● USD — Non Farm Payrolls (OCT); Unemployment Rate (OCT)
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The Contentworks team