The PoO team was reminded of the sorts of things that influence world currencies by a headline in Waikanae Watch today which informed us:
The Russian ruble has gained over 30% against the US dollar in the past 12 months.
Click to view
The article, accompanied by a graph which illustrates the ruble’s rise (above), was teasingly succinct. It said:
This makes it one of the world’s strongest currencies — and this despite all the West’s sanctions.
And that was it. There was no explanation of the forces at work on either the ruble or the US dollar.
Google has yet to catch up with these currency shifts, apparently, because it did not mention the ruble when PoO asked it to identify the world’s strongest currencies.
It responded:
The world’s strongest currencies, measured by exchange rate against the US Dollar, are consistently led by Middle Eastern oil-rich nations: the Kuwaiti Dinar (KWD), Bahraini Dinar (BHD), Omani Rial (OMR), and Jordanian Dinar (JOD), followed by currencies like the British Pound (GBP), Swiss Franc (CHF), and Cayman Islands Dollar (KYD).
These currencies derive strength from economic stability, oil wealth (KWD, BHD, OMR), fixed exchange rates (KYD), or strong financial sectors (CHF, GBP).
Top Strongest Currencies (by exchange rate):
1. Kuwaiti Dinar (KWD): Often the highest, due to significant oil wealth.
2. Bahraini Dinar (BHD): Another oil-backed currency with high value.
3. Omani Rial (OMR): Also benefits from oil exports and pegs to the USD.
4. Jordanian Dinar (JOD): Strong due to stability and pegged rate.
5. British Pound Sterling (GBP): A major global currency with high value.
6. Gibraltar Pound (GIP): Often listed due to its peg to the GBP.
7. Swiss Franc (CHF): Known for stability and wealth, pegged to the USD.
8. Cayman Islands Dollar (KYD): Strong due to its offshore finance sector, pegged to USD.
9. Euro (EUR): A major currency, though lower per unit than the top Middle Eastern ones.
The Google response explained that “strongest” usually means highest value per unit (e.g., 1 KWD buys over 3 USD). However, currencies like the US Dollar (USD) and Euro (EUR) are more “powerful” or widely used in global trade and reserves, even if their unit value is lower.
PoO was prompted to dig deeper.
The Times of India described the Russian ruble as the top performer against the US dollar after its 45 per cent surge in 2025.
“This unexpected strength caught Russian officials off guard and poses challenges for the country’s war-affected economy. The currency is now trading around 78 per dollar, similar to levels before Russia’s Ukraine invasion…”
But that does not mean the sanctions are having no effect on the Russian economy.
To the contrary, one factor at work on the ruble is the collapse in demand for foreign currency inside Russia.
Sanctions have reduced access to dollars and euros, cutting demand sharply. At the same time, the central bank has kept borrowing costs extremely high, making ruble investments more attractive to locals.
The ruble has stayed strong despite lower oil prices and new sanctions from the US and Europe. This strength is causing problems by reducing the value of export earnings when converted to rubles.
The Bank of Russia has been supporting the currency by selling foreign currency, particularly yuan and gold, from the National Wellbeing Fund. This is helping offset declining energy revenues.
The Times of India report said the ruble’s impressive performance put it among the world’s top five performing assets in 2025, alongside precious metals like platinum, silver, palladium, and gold.
On the other hand, let’s not forget that the vale of the US dollar shrunk 9 per cent against other major currencies last year.
It suffered its sharpest six-month decline since 1973 in the first half of the year, falling 10.8 per cent amid Donald Trump’s sweeping tariffs, surging national debt and waning investor confidence.
Since then the Federal Reserve has cut interest rates, and when interest rates go down, the value of currencies tend to go down too.
The turbulence was furthered by the US having its longest government shutdown ever.
To cap things off, Trump has been undermining the independence of the US Federal Reserve and threatening to fire Chairman Jerome Powell.
The US got off to a poor start this week, following the news that the beleaguered Powell is facing a criminal investigation from the US Department of Justice (a case said to be linked to his congressional testimony about the central bank’s $2.5 billion headquarters renovation).
The news alarmed USD investors because it has raised fresh concerns over the future independence and credibility of the Federal Reserve.
Bob Edlin is a veteran journalist and editor for the Point of Order blog HERE. - where this article was sourced.
3 comments:
America is cooked mate
Not surprising. With the current clown in charge in the USA, the rest of the world now has confidence that any deal done with that government (or any of the bootlicker tech oligarchs running companies there) isn’t worth the paper it’s written on. Market forces will come into play and the other 199 countries are free to move forward. It will take some time to adjust, as the US was a rich nation and ready to do trade. How times change!
Pegged currencies should not be included in these lists.
The true market value of a pegged currency may be only a fraction of its arbitrarily nominated value.
I found this out the hard way when the Lebanese Lira was 'unpegged' and slid rapidly from 1500 to the USD to tens of thousands. It is now listed at just on 100,000 to the dollar and (on one website) the least desirable currency on the planet.
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