The unprecedented U.S. monetary and fiscal response to the coronavirus crisis led to a weaker U.S. dollar. However, the U.S. dollar remains one of the most valuable currencies in the world. The euro is the main rival of the U.S. dollar in international markets, and it was worth slightly more as of 2020. That has not always been the case, with the euro to dollar rate fluctuating over the years.
In general, more valuable currencies tend to be stronger, mostly because weak currencies lose value in the long run. However, some strong currencies, such as the Japanese yen (JPY), are less valuable because of inflation that occurred decades ago.
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7. Euro: 1 EUR = 1.16 USD
On Sept. 25, 2020, the euro (EUR) to U.S. dollar (USD) exchange rate was about €1 for $1.16. The U.S. dollar generally weakened against the euro during the coronavirus crisis in 2020 because the U.S. had more economic stimulus. A weak currency is not always bad, as it can help exports. The European Central Bank (ECB) that sets monetary policy for the eurozone has more independence from national governments than most other central banks. That independence helps keep the euro strong, but it also contributed to the European sovereign debt crisis.
6. Cayman Islands Dollar: 1 KYD = 1.20 USD
The Cayman Islands dollar (KYD) was set at 1.20 USD back in the 1970s. That seems like an easy way to make a currency worth more than the U.S. dollar, but it is harder than it looks. A currency peg like that can be difficult to maintain when local economic conditions are poor and the U.S. is raising interest rates. The country's status as a tax haven helps to support the value of the Cayman Islands dollar.
5. British Pound: 1 GBP = 1.27 USD
Bank of England policymakers generally kept pace with developments in other countries over the last several decades and kept the pound more valuable than the U.S. dollar. The British pound (GBP) was traditionally worth more than the U.S. dollar, but it declined during much of the 20th century. This decline reversed during the 1980s, and the British pound regained its old advantage over the U.S. dollar.
4. Jordanian Dinar: 1 JOD = 1.41 USD
Like the Cayman Islands Dollar, the Jordanian Dinar (JOD) was pegged to the U.S. dollar at a higher value. The idea was that a stable exchange would help to attract U.S. investment in Jordan. It is crucial to remember that any country can peg its currency to the dollar at any value. However, the currency must keep its value relative to the U.S. dollar to maintain that peg. Jordan successfully did that during the first two decades of the 21st century.
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.
3. 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. The Omani rial (OMR) maintained its value against the dollar due to Oman's historically tight monetary policy and financial restrictions. Omani policymakers have generally restricted the money supply to protect the country against war and conflict in the Middle East. That has impacted the country's inflation rate, and lending practices in Oman tend to favor risk-averse companies and business ventures.
2. Bahraini Dinar: 1 BHD = 2.66 USD
The Bahraini dinar (BHD) was pegged to the U.S. dollar at a slightly higher value than the Omani rial. The Bahraini dinar's yearly average has remained close to its current exchange rate since 2011, despite the significant effect that low oil prices had on Bahrain's economy. Bahrain's inflation rate was also modest and relatively stable.
1. Kuwaiti Dinar: 1 KWD = 3.26 USD
The Kuwaiti dinar (KWD) was the most valuable government-backed currency as of 2020. Some currencies not backed by governments, such as gold and bitcoin, were actually worth far more. Substantial oil production helped augment Kuwait's wealth and support the value of the Kuwaiti dinar. Over the years, Kuwait amassed a significant sovereign wealth fund. The Kuwait Investment Authority manages this fund and helps to ensure that Kuwait remains prosperous.