In this article, we discuss the 15 Best Performing Currencies Against The US Dollar. If you want to jump to the Best Performing Currencies Against The US Dollar, you can go directly to 5 Best Performing Currencies Against The US Dollar.
The global economy and exchange rates are closely linked, with currency valuation shaping international trade and investment flows. Exchange rate fluctuations impact businesses’ competitiveness, profitability, and consumers’ purchasing power. Governments and central banks intervene to manage exchange rates, aiming to achieve economic stability and competitiveness. Understanding exchange rate dynamics is crucial for navigating the complexities of the global economy.
The International Monetary Fund (IMF) has revised its projections for global economic growth, showing improvements in both the United States and China. Citing a faster-than-expected easing of inflation, the IMF’s chief economist, Pierre-Olivier Gourinchas, suggests a ‘soft-landing’ scenario is on the horizon. The IMF now anticipates a global growth rate of 3.1% in 2024, a slight increase from its previous forecast in October. Growth is expected to remain steady in the following year, at 3.2%. Despite these positive adjustments, Gourinchas warns of lingering risks such as geopolitical tensions and disruptions in shipping, particularly in the Red Sea.
In 2021, global trade thrived, with exports totaling $24.23 trillion and imports at $21.93 trillion, resulting in a positive trade balance of $2.30 trillion. Trade growth matched the world growth rate of 12.59%. The world’s GDP reached $96.88 trillion, with services exports and imports amounting to $6.23 trillion and $5.70 trillion respectively. Trade accounted for 28.88% of GDP for exports and 27.94% for imports. According to The World Trade Organization, global trade and output slowed in Q4 2022 due to tighter monetary policy in key economies like the US and EU. This led WTO economists to revise down trade projections for 2023 but maintain optimism for 2024. World merchandise trade volume is forecasted to grow by 3.3% in 2024.
The banking sector is pivotal in the interplay between the global economy, trade, and currency exchange. Banks facilitate international trade through financing and risk management services while providing currency exchange and hedging options to mitigate risks. They also influence economic growth through lending activities, making a stable and efficient banking sector vital for global economic stability and trade facilitation. So, before moving to our list of 15 Best Performing Currencies Against The US Dollar, let us take a look at some of the key players in this sector such as, JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corporation (NYSE:BAC), and Wells Fargo & Company (NYSE:WFC).
JPMorgan Chase & Co. (NYSE:JPM)
JPMorgan Chase (NYSE:JPM), America’s largest bank with $3.4 trillion in assets, operates over 4,800 branches and 15,000 ATMs nationwide. Offering consumer, business, and investment services, it reported $158.10 billion in revenue for 2023, a 22.85% year-over-year increase, with fourth-quarter revenue reaching $38.57 billion, up by 11.66%.
JPMorgan Chase’s CEO, Jamie Dimon, made headlines at the end of February 2024, by selling approximately $150 million worth of his stock in the bank. This action is part of a larger plan outlined by the bank in October to sell 1 million shares out of the 8.6 million owned by Dimon and his family. As one of Wall Street’s longest-serving chief executives, Dimon’s stock sale reflects strategic financial management within the banking giant.
Bank of America Corporation (NYSE:BAC)
Bank of America (NYSE:BAC) ranks among the largest U.S. banks, boasting assets exceeding $2.4 trillion. With over 3,700 branches nationwide and several foreign branches, it provides comprehensive banking services to individuals and businesses. Additionally, through Merrill (formerly Merrill Lynch), Bank of America offers investment and wealth management solutions.
Bank of America reported $98.58 billion in revenue for the twelve months ending December 31, 2023, marking a 3.82% year-over-year growth. However, revenue for the fourth quarter of 2023 decreased by -10.49% year-over-year to $21.96 billion.
Wells Fargo & Company (NYSE:WFC)
Based in San Francisco, Wells Fargo (NYSE:WFC) is the fourth largest U.S. bank, holding over $1.7 trillion in assets. Offering full-service banking, including consumer and commercial services, mortgage lending, credit cards, and wealth management, it operates approximately 4,400 branches and 12,000 ATMs nationwide, emphasizing in-person access. Reporting $82.60 billion in revenue for the twelve months ending December 31, 2023, with 11.07% year-over-year growth, Wells Fargo also saw revenue of $20.48 billion in the fourth quarter of 2023, reflecting a 2.22% year-over-year increase.
Bank of America Corp.’s Merrill arm and Wells Fargo & Co.’s brokerage unit are now providing access to exchange-traded funds (ETFs) directly investing in Bitcoin, indicating a growing acceptance of such products by mainstream financial firms. These approved ETFs are being offered to select wealth management clients with brokerage accounts upon request.
Methodology
To curate a list of 15 Best Performing Currencies Against The US Dollar, we looked up exchange rates of foreign currencies. After assessing exchange rates against the US dollar as of March 4th, 2024, we identified currencies demonstrating substantial value compared to the US dollar. These currencies have displayed a noteworthy performance in the global currency markets, indicating strength against the US dollar. Below is the list of 15 Best Performing Currencies Against The US Dollar.
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15. Bulgarian Lev
1 USD = 1.80 BGN
The Bulgarian lev (BGN) maintains its position as a stable currency within the European region. Serving as the official currency of the Republic of Bulgaria since 1881, the lev has been a symbol of economic stability and resilience. With a current exchange rate of 1 USD = 1.8 BGN, the lev has demonstrated consistency in its value against the US dollar. Bulgaria’s economy, while facing its own set of challenges, has shown remarkable resilience amidst global uncertainties.
The country’s strategic location and membership in the European Union provide a platform for economic growth and stability. However, like many nations, Bulgaria encountered economic challenges in recent years. The COVID-19 pandemic posed significant hurdles, affecting various sectors such as tourism and export industries. Despite these challenges, Bulgaria remains committed to diversification strategies and economic reforms to bolster resilience and ensure sustainable growth in the face of evolving global dynamics.
14. New Zealand dollar
1 USD = 1.64 NZD
The New Zealand dollar (NZD) rightfully earns its place among the strongest currencies globally, and its strength has been on a continuous ascent. This upward trajectory can be attributed to several factors, including the nation’s political stability, elevated interest rates, and robust GDP growth.
New Zealand’s commitment to economic freedom has positioned it prominently on The Heritage Foundation’s Index of Economic Freedom, where it currently holds the third rank. This recognition underscores New Zealand’s status as a champion of economic freedom on a global scale. The country’s adherence to principles that foster economic growth, stability, and individual liberties contributes significantly to the strength of the New Zealand dollar.
13. Australian Dollar
1 USD = 1.53 AUD
13th on our list of Best Performing Currencies Against The US Dollar is Australia Dollar. The Australian dollar (AUD) serves as the official currency of Australia and extends its usage to encompass external territories and certain Pacific Island states. While not ranking as the most valuable currency globally, the AUD stands out for its notable value and exceptional stability. As the fifth most traded currency in the forex market, it commands approximately 6.8% of daily transactions. The popularity of the Australian dollar can be attributed to factors such as its currency stability, elevated interest rates, and the perceived advantages it offers in terms of diversification.
12. Canadian dollar
1 USD = 1.36 CAD
The Canadian dollar (CAD), serving as the official currency of Canada, enjoys a prominent status among global currencies, particularly in central banks’ foreign exchange reserves. This popularity is attributed to Canada’s well-established legal and political stability, making the CAD a reliable choice for international transactions. In the realm of forex trading, the Canadian dollar is highly sought after, constituting approximately 5% of daily trades in the global foreign exchange market. Its liquidity and stability contribute to its widespread use in currency markets.
As of March 2024, economic indicators show a positive trend in the Canadian manufacturing sector. The S&P Global Canada Manufacturing Purchasing Managers’ Index reported a seasonally adjusted increase from 48.3 in January to 49.7 in February. This marks its highest level since April, signifying potential improvements in manufacturing activities. Such data suggests resilience and positive momentum in Canada’s industrial landscape, which can have broader implications for the overall economic performance of the country.
11. Singapore Dollar
1 USD = 1.34 SGD
The Singapore dollar (SGD) stands as the official currency of Singapore, and it is also utilized in Brunei. With an exchange rate of approximately 1.34 Singaporean dollars to 1 US dollar, the SGD is deemed relatively robust, reflecting its perceived strength in the international currency market. Despite not being the most traded currency, it holds a notable position as the 13th most traded on the foreign exchange market, accounting for around 1.8% of daily forex transactions. This indicates a substantial level of global economic activity involving the Singapore dollar. Singapore Dollar is 11th on our list of Best Performing Currencies Against The US Dollar.
10. Brunei dollar
1 USD = 1.34 BND
The Brunei dollar (BND) is tenth on the list of Best Performing Currencies Against The US Dollar. It has served as the official currency for the Sultanate of Brunei since 1967. Notably, the Brunei dollar and the Singapore dollar are interchangeable at face value, with both currencies being recognized as legal tender in each respective country.
In terms of economic developments, Brunei faced challenges in 2023 as its economy remained stagnant following the global impact of the COVID-19 pandemic. The country’s reliance on hydrocarbon production, particularly crude oil, contributed to economic challenges. Declines in crude oil production and a downturn in the tourism sector further hampered economic growth during this period. The combination of these factors underscores the vulnerability of Brunei’s economy to external shocks, emphasizing the need for diversification strategies and resilience in the face of global uncertainties.
9. Euro
1 USD = 0.92 EUR
The euro (EUR) serves as the official currency for the Eurozone, encompassing 20 out of the 27 European Union member countries, and is placed 9th on our list of Best Performing Currencies Against The US Dollar. Introduced in physical form in 2002, the euro operates as a free-floating currency. Notable countries using it include Germany, France, and Spain. As the world’s second reserve currency, the euro ranks as the second most traded currency globally, trailing only the US dollar. The EUR/USD, known as ‘Fiber,’ stands out as the most traded forex pair, representing nearly a quarter of daily forex transactions.
8. Swiss Franc
1 USD = 0.88 CHF
The Swiss franc (CHF) holds the status of the official legal tender in both Switzerland and Liechtenstein. Renowned for its stability, the Swiss franc is considered a safe haven currency, a reputation it earns from Switzerland’s long standing political stability. Introduced in 1850, the currency experienced a brief period of being pegged to the euro before transitioning to a free-floating exchange rate.
Switzerland, recognized as one of the most stable and affluent nations globally, further enhances the Swiss franc’s appeal. It serves as a safe haven for investors during periods of economic uncertainty, joining the ranks of other renowned safe-haven currencies like the US dollar (USD) and the Japanese yen (JPY).
In the global financial landscape, the Swiss franc is a significant player, holding the position as the 7th most traded currency. Its popularity in international markets underscores its importance in global trade and finance, reflecting both its stability and the confidence investors place in it during times of economic turbulence.
7. Cayman Island Dollars
1 USD = 0.83 KYD
The Cayman Islands, a British territory in the Caribbean, operates as a prominent offshore financial centre. The local currency, the Cayman Islands dollar (KYD), was introduced in the 1970s and is pegged to the US dollar, with an exchange rate of approximately 0.83 Cayman Islands dollars for 1 US dollar. This pegging makes it the sole and robust currency among Caribbean nations.
The exchange rate has been regulated by the 1974 Currency Law, updating the parity between KYD and the US dollar to KYD $1 = US $1.20. This legal framework, established in 1974, remains in effect, ensuring the stability of the Cayman Islands dollar relative to the US dollar.
6. Gibraltar Pound
1 USD = 0.79 GIP
Sixth on our list of 15 Best Performing Currencies Against The US Dollar is Gibraltar Pound. The Gibraltar pound (GIP) is recognized as the joint fifth-strongest currency globally, with an exchange rate of 1 Gibraltar pound buying 1.27 US dollars (or US$1 equals 0.79 Gibraltar pounds).
Situated at the southern tip of Spain, Gibraltar is officially a British territory. The Gibraltar pound, introduced in the 1920s, is pegged to the British pound at par, meaning that one GIP equals one GBP. While notes and coins in circulation use British names, they feature distinct designs and are only accepted within Gibraltar. The GIP is not officially recognized in the United Kingdom, but it can be exchanged for British pound sterling notes at a one-to-one ratio. Gibraltar’s economy is diversified, encompassing financial services, online gaming, navigation, and tourism. The country also serves as a significant port in the Mediterranean Sea, with bunkering (fuel supply to ships) being another key industry.
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Disclosure: None. 15 Best Performing Currencies Against The US Dollar is originally published on Insider Monkey.