| 7 Currencies Worth More than the US Dollar | ||
|---|---|---|
| Name | Symbol | Exchange Rate |
| Swiss Franc | CHF | 1.15 |
| Caymanian Dollar | KYD | 1.21 |
| British Pound | GBP | 1.28 |
| Jordanian Dinar | JOD | 1.41 |
| Omani Rial | OMR | 2.60 |
| Bahraini Dinar | BHD | 2.65 |
| Kuwaiti Dinar | KWD | 3.25 |
1. Swiss Franc: 1 CHF = 1.15 USD
The Swiss Franc (CHF) to US Dollar (USD) fluctuated between 0.9862 and 1.13 from June 2022 to June 2023. The lowest exchange rate was observed on November 3rd, 2022 when 1 CHF was equivalent to $0.9862. The highest exchange rate over the period occurred on May 4th, 2023, when 1 CHF was equivalent to $1.13. The average exchange rate over this period was $1.06.
From June 2022 to June 2023, Switzerland’s economy experienced a slowdown, with GDP growth decreasing from 2.1% in 2022 to an expected 1% in 2023, amidst high global economic uncertainty. Inflation, which peaked at 3.5% in August 2022, was reduced to 2.6% by April 2023 due to decreases in energy and food product prices, and was projected to further decrease to 2% by year end.
The Swiss National Bank, the central bank of Switzerland, responded to these inflationary pressures by tightening monetary policy, with policy rate hikes expected to further reduce inflation to 1.9% in 2024. Despite these economic challenges, Switzerland maintained political stability, continuing its dialogue with the EU regarding single market accession.
These factors (economic performance, inflation, monetary policy, and political stability) likely influenced the Swiss Franc’s movements during this period, with the economic slowdown and inflation potentially exerting downward pressure, and the central bank’s policy rate hikes and political stability providing support.
2. Caymanian Dollar: 1 KYD = 1.21 USD
The Caymanian Dollar (KYD) to the USD exchange rate remained stable at 1.20 from June 2022 to June 2023. There was no volatility during this period, indicating a stable economic environment in the Cayman Islands. This stability could be attributed to the Cayman Islands’ fixed exchange rate policy, where the value of the Caymanian Dollar is pegged to the US Dollar at a fixed rate.
From June 2022 to June 2023, the Cayman Islands demonstrated strong economic performance, with a real GDP growth of 3.7% in 2022, aided by a rebound in tourism. It is expected that this growth will continue, with an average growth of 2% projected for 2023 to 2025.
The Cayman Islands’ debt to GDP ratio was a low 8.9% at the end of 2022, significantly lower than the 43% median for similarly rated countries. Also, the country maintained a stable political environment, with the country’s institutions exhibiting effective policymaking.
These factors, along with the country’s resilience to global efforts against tax evasion, likely contributed to the stability of the Caymanian Dollar during the abovementioned period.
3. British Pound: 1 GBP = 1.28 USD
The British Pound (GBP) to USD exchange rate fluctuated between $1.06 and $1.28 from June 2022 to June 2023. The lowest exchange rate was observed on September 28th, 2022, when 1 GBP was equivalent to $1.06. The highest exchange rate occurred on June 16th, 2023, when 1 GBP was equivalent to $1.28.
From June 2022 to June 2023, the United Kingdom’s (UK) economic performance was characterized by a broadly flat GDP in the first half of 2023, with underlying growth expected to be higher than headline GDP growth due to temporary factors such as strikes and an additional bank holiday. This underlying growth was projected to be roughly 0.2% per quarter in the first and second quarters of 2023, which is low when compared to historical average growth rates, in the the second quarter of 2023 it was around half a percent stronger than projected in February 2023.
Interest rate movements during the period saw the Bank of England, the central bank of the UK, increase its Bank Rate by 0.25% to 4.5% in May 2023. The market-implied path for the Bank Rate peaked at around 4.75% in the fourth quarter of 2023 before ending the forecast period at just over 3.5%.
These factors contributed to the movements of the British Pound during the period. The recent appreciation of GBP put some downward pressure on UK import price inflation, and over time on CPI inflation.
4. Jordanian Dinar: 1 JOD = 1.41 USD
The Jordanian Dinar (JOD) to the USD exchange rate remained stable at $1.41 from June 2022 to June 2023. There was no volatility during this period because like the Caymanian Dollar, the Jordanian Dinar has been pegged to the U.S. dollar.
From June 2022 to June 2023, Jordan’s economic performance was characterized by a GDP growth of 2.5% driven by robust private spending despite higher interest rates. The unemployment rate eased to 21.9% in the first quarter of 2023, and inflation receded to a 15-month low of 2% in May 2023. The Central Bank of Jordan maintained its re-discount interest rate at 8.25% in June 2023.
When it comes to political stability, Jordan continued to promote economic inclusion, develop sustainable municipal infrastructure, and green energy, and strengthen competitiveness and resilience. The country also focused on diversifying access to finance and fostering innovation, strengthening the capacity of corporations and other business enterprises, and improving the overall business environment.
Most major capitalist countries pegged their currencies to the U.S. dollar under the Bretton Woods System in the mid-20th century. In the early 21st century, many nations in the Caribbean and the Middle East still tied their exchange rates to the dollar.
5. Omani Rial: 1 OMR = 2.60 USD
Oman is yet another country that pegged its currency to the U.S. dollar at a fixed exchange rate (1 OMR to 2.60 USD). The Omani rial (OMR) has maintained its value against the dollar due to Oman’s oil production and its historically tight monetary policy and financial restrictions.
Over the period June 2022 to June 2023, the OMR experienced little issue with its pegged currency. This can be a result of the country’s economic performance, interest rate movements, and political stability. The economic performance of Oman during the abovementioned period was marked by a steady growth rate coupled with the government’s efforts to diversify the economy and implement fiscal consolidation measures.
Politically, Oman remained stable throughout the period, with no major incidents reported that could have affected the value of the Rial.
This political stability, coupled with steady economic performance and stable interest rates, likely contributed to the stability of the Omani Rial’s peg.
6. Bahraini Dinar: 1 BHD = 2.65 USD
The Bahraini dinar (BHD) was pegged to the U.S. dollar at a slightly higher value than the Omani Rial.
From June 2022 to June 2023 Bahrain experienced strong growth, in line with other Gulf Cooperation Council countries. Continued fiscal reform momentum and high oil prices improved fiscal and external balances. The economy grew by 4.9% in 2022, driven by 6.2% growth in non-hydrocarbon GDP while hydrocarbon GDP contracted by 1.4%. Non-hydrocarbon growth was driven by public, financial, and hospitality services and manufacturing.
GDP growth is projected to moderate to 2.7% in 2023, with non-oil GDP growing by 3.3%, reflecting fiscal consolidation, higher interest rates, and a base effect from 2022 strong growth.
CPI inflation accelerated from -0.6%, on average, in 2021 to 3.6% in 2022. With economic recovery well underway, ongoing fiscal reforms, and higher oil prices, the state budget deficit declined significantly, narrowing to 1.2% of GDP in 2022, from 6.4% in 2021, while the overall fiscal deficit declined from 11% to 6.1% of GDP.
Government debt declined to 117.6% of GDP in 2022 from 127.1% of GDP in 2021. Bahrain’s current account improved markedly and posted its largest surplus in decades, estimated at 15.4% of GDP in 2022, up from 6.6% of GDP surplus in 2021.
Given the strong economic performance and fiscal stability, it is likely that Bahrain’s peg will remain for the foreseeable future.
7. Kuwaiti Dinar: 1 KWD = 3.25 USD
The Kuwaiti Dinar (KWD) to USD exchange rate fluctuated between $3.22 to $3.30 from June 2022 to June 2023. The minimum exchange rate was recorded on October 20th, 2022, at $3.22, while the maximum exchange rate was seen on March 18th, 2023, at $3.30. The average exchange rate during the period was $3.26.
During the abovementioned period, the Kuwaiti Dinar fluctuation could be a result of various economic and political factors. Kuwait’s economy largely recovered from the pandemic, with growth surging to 8.2% in 2022, primarily driven by high oil production and prices. Non-oil growth also rose to 4.0% in 2022, reflecting strong domestic demand. However, real GDP growth was projected to fall to 0.1% in 2023 due to agreed OPEC+ oil production cuts and slower external demand growth.
The fiscal and external balances strengthened due to higher oil revenues, but the overall fiscal surplus was projected to drop to 6.9% of GDP in 2023, and fall steadily thereafter into deficit over the medium term.
The Central Bank of Kuwait also implemented policy rate hikes to contain inflation and maintain financial stability, which could have influenced the Dinar’s value.
The country’s approach to fiscal policy, monetary policy, and structural reforms, as well as its response to global decarbonization trends, could have played a role in the movements of the Kuwaiti Dinar over the period.
Frequently Asked Questions
What Affects a Currency Exchange Rate?
Broadly speaking, the exchange rate for countries with free floating currencies is usually affected by the strength of a country’s economy. In addition, though, exchange rates are relative, meaning they depend on the country with which you’re comparing with at any given time. So, economic conditions and policies (e.g., concerning inflation, interest rates, debt) in the respective countries can affect the exchange rate.
What Is the Exchange Rate for the Canadian Dollar and U.S. Dollar?
As of July 2023, one Canadian dollar (CAD) would get you about 0.76 U.S. dollars. Looking at it the other way around, if you’ll be traveling to Canada and need some local currency, you’d be able to get 1.32 Canadian dollars for just 1 U.S. dollar.
What is the Most Powerful Currency in the World?
The U.S. dollar is arguably considered to be the most powerful or strongest currency in the world. There are a variety of reasons for this. The U.S. economy and government are consistently stable and strong, and has been for a long time. The U.S. dollar makes up the majority of the world’s currency reserves. It’s a trusted currency and accepted across the globe.
What is a commodity currency?
A commodity currency refers the currency of a country whose economy depends heavily on the export of certain raw materials or commodities. The value of a commodity currency is closely linked with the price of the particular commodity. Some examples include the Canadian Dollar, the Australian Dollar and the New Zealand Dollar.
The Bottom Line
The price of a currency, often referred to as the exchange rate, is the rate at which one currency can be exchanged for another, determined by supply and demand dynamics in the foreign exchange market. The value of a currency, on the other hand, refers to its purchasing power, or the amount of goods or services that can be bought with a unit of the currency. Factors affecting the value of a currency include inflation, interest rates, political stability, economic performance, and market speculation. While the US Dollar is often used as a benchmark due to its status as the world’s reserve currency, other currencies can be valued more than the US Dollar if they have stronger purchasing power or if their countries have more favorable economic conditions.
