5 Safest Currencies in the World

Currency trading remains one of the major investment opportunities. But the problem with this type of investment is that those currencies that are considered safe don’t give good rewards. This is different from tire stocks where you are always assured of getting a dividend.


What does it mean when people say a currency is safe or stable?


In simple words, a safe or stable currency is whose exchange rate doesn’t fluctuate easily. Most currencies around the world are not safe because their exchange rate keeps changing depending on the market forces.


Currency volatility is usually a major concern for most investors. The higher the volatility rate of a currency, the riskier it is. There are many factors that usually accelerate the volatility of currencies. They include things such as major world events, economic depression, war among others.


Here are 5 safest currencies in the world:


1.    U.S. Dollar


There’s no doubt that the U.S. dollar is one of the world’s most stable currencies. Although the currency sometimes shades off some of its value, it has largely remained stable for several years.


It is also important to note that the federal reserve has a total of $1.5 trillion in mortgage-backed securities and $2.2 trillion in treasury debt.


The fact that most world currencies are pegged on the dollar also shows just how stable it is. Besides, The United States is a developed economy and always has ways of keeping its currency stable.


2.    Norwegian krone


The Norwegian krone has for a long time maintained its status of a safe currency. This is largely attributed to the fact Norway doesn’t have a net debt. Besides, the Norwegian krone is not affected by the failures or events of other countries since it is a standalone currency.


However, the krone has not been very stable in recent years due to the falling prices and low economic performance at home.


3.    Singapore dollar


The Singapore dollar is also among the world’s safest currencies. It ranks number 13 as the most traded currencies in the world and is valued highly within the Asia-Pacific region.


The strength of the Singapore dollar is attributed to the country’s strategic and relentless efforts of maintaining the stability of its local currency. The Monetary Authority is always keen on what’s happening on the international exchange rates and moves in quickly to take appropriate measures.


4.    Japanese Yen


Although Japan has one of the highest national debts in the world, the country has effectively managed its inflation rates for many years. In fact, the Japanese Yen is currently the third most traded currency.


5.    European Euro


The Euro holds second place in terms of the reserve world currency after the US dollar. It is also among the world’s most stable currencies. Despite the fact that the Euro is prone to fluctuations, the number of currencies and amount of gold reserves make it safer compared to other currencies.


Bottom line


Currency trading offers a great investment opportunity. However, understanding how the currency market works is a must for you to succeed. This includes checking out Forex pairs explained videos and other educational materials from reputable places like Capital.com.


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