Exploring The Major Currencies Of The World
Posted by Allison on 13 April 2009, 11:05
The currency you have in your pocket at this very moment will depend on what country you are currently in. Whether you are on holiday or relaxing in the comfort of your own home, the coins and notes you have with you will be accorded a certain value - and that value can change remarkably just by crossing the border into another country.
Take the opportunity to explore the world's major currencies below.
The US Dollar is the biggest currency the world has. It is highly influential and is capable of having a big effect on the stock markets throughout the world. It is over two hundred years old – a fact which is somewhat surprising given its status on the world economic stage. Many people believe it to have been around for a much longer amount of time.
The US Dollar can be recognised by the symbol $ and on websites which use currency conversions or deal in currencies on a day to day basis it is often abbreviated to USD for ease of use. One US dollar is made up of a hundred cents. The current bill size that we are used to seeing was first seen in 1928, and the colloquial term for a dollar bill is most commonly a buck.
Because of America's influence on the world stage people all around the world often look on the US dollar as being a measure of how strong their own currency is at any time. At present for example a single British pound will buy you almost two US dollars – a clear indication that your money will go much further in America than it will in the UK.
While the US dollar has experienced some weaknesses in the past they don't traditionally tend to last for long. All in all it is the world's main currency for a reason – it tends to regain its position of strength very quickly indeed. Perhaps it is because of this that several other countries have also decided to use this currency, including East Timor and Panama.
While nothing is certain – especially not where the stock markets are concerned – the overall strength of the US dollar looks set to continue far into the future.
The British pound takes third place in the total reserves of money the world has at its disposal. It also now holds the record as being the oldest currency around today – dating right back to Anglo Saxon times.
The British pound can be recognised by the symbol £ and is abbreviated to GBP on websites which deal in different currencies. You will also quite often hear the British pound being referred to as pounds sterling. A single pound is made up from a hundred pence. The size of the coins and notes in circulation has changed over the years, with the general trend being that both have become smaller. A pound is colloquially known as a quid.
Over time some coins have been withdrawn from circulation, such as the halfpenny in recent times. The pound note was also withdrawn and replaced with a pound coin.
Perhaps the biggest event in recent times to involve the British pound was decimalisation in 1971. Before this the currency was split into pounds, shillings and pence. Decimalisation meant that shillings were no longer in use, and the currency itself became much easier to understand, both for Britons and everyone else who dealt with it on the world stage.
When the changeover took place, both the old coins and new coins could be used for a while, but the new currency quickly took over and while it was difficult to get used to it was much easier to understand right from the start.
The British pound has so far stood firm against the possibility of being axed in favour of the Euro, but it is by no means certain that things will continue to progress in the same direction. There is still a chance that the world's oldest currency may still meet its end in favour of one of the newest ones.
While not commonly recognised as such, the Swiss franc is actually one of the world's strongest eight currencies on the stock exchanges. While some versions of the franc met their demise when the Euro came onto the scene (the French franc being the most well known example) the Swiss franc still remains as the last franc standing.
The Swiss franc is known by the letters CHF on the stock exchange and on currency related websites, and is divided into a hundred parts. These parts are known by different names depending on which language the user of the currency is fluent in. The Swiss banknotes are very noticeable due to the fact that they are much more colourful than many other banknotes are, using a plethora of different colours on every single denomination.
The history of the franc stretches back over two hundred years, but the currency and coins which we are more familiar with today only date back to around 1850. Switzerland and Liechtenstein are now the only two countries which use the Swiss Franc; other countries which used other versions of the franc gave them up in favour of the new Euro currency which has become widespread throughout Europe in the past couple of years.
Despite being one of the few countries that didn't swap their own currency for the Euro when it first came into being, Switzerland's currency still holds its own on the world trading stage. This is evident by the fact that it is one of the eight top currencies regularly being traded, alongside such big names as the mighty US dollar and the Japanese yen.
Only time will tell whether or not the Swiss franc will eventually be swallowed up by the Euro, but at present there is no reason to suppose that it won't still be around in another two hundred years.
Hong Kong dollar
One of the many other dollar related currencies in the world apart from the US dollar, the Hong Kong dollar can also be recognised by the $ symbol. The letters HKD are used in the currency code to denote this particular currency, and indeed the letters HK are often put before the dollar sign to make it clear that the currency in question is the Hong Kong dollar. This is because most people assume the dollar sign relates to the American dollar unless it is revealed otherwise. Like the American dollar the Hong Kong dollar is also divided into a hundred cents per dollar. While Hong Kong is the main user of this currency, China also uses it in an unofficial capacity.
As hard as it may be to believe, the Hong Kong dollar is only a fairly recent entrant to world currency. Although it is one of the eight main currencies traded daily between people in various different countries, it only came into being in the 20th century. The Hong Kong dollar has been pegged to the US dollar for some twenty years, meaning that its value is determined according to this pegging system.
The history of currency in Hong Kong is somewhat chequered due to a number of factors, including the Second World War (when the Japanese brought in the Military Yen as the country's only currency) and the fact that its past has seen it flourish as a trading port. At one point Hong Kong had several currencies in common use – and none of them were the official currency of the country.
It says rather a lot for the strength of the country and of the currency itself that it stands shoulder to shoulder with such giants as the US dollar and the British pound on the world exchanges.
Another variation of the world famous dollar is the Canadian dollar, which is recognised in the currency code by the letters CAD. These letters usually precede the dollar sign whenever an amount of currency is written down, to make it clear that the currency in question is Canadian in origin.
Unlike some other dollar currencies, the Canadian dollar is only used in Canada. It has been very closely tied into the US dollar throughout much of its history, which stretches back over a hundred and fifty years. As with other dollar currencies used throughout the world, the Canadian dollar can be broken down into a hundred cents per dollar.
All of the five denominations of Canadian banknotes which are currently in circulation are designed in different colours. Each has the picture of a different person on it – with the twenty dollar note displaying a picture of Queen Elizabeth II.
At present the Canadian dollar is holding steady against the US dollar, and this has in fact been the case for some time. It is quite common for a Canadian dollar to be swapped virtually like for like for an American dollar, as the two currencies are never that far apart in value. In this sense the Canadian dollar is a relatively strong currency on the world's markets.
Although the Euro only came into being in 2002, the push towards having a single European currency can be traced back to the Fifties. The Euro was actually introduced by electronic means three years earlier in 1999, although the notes and coins that are now used in fifteen European countries did not come into circulation until 2002.
The banking code of the Euro is EUR, and its symbol is similar to a capital C with two horizontal lines across the middle to form the E. One Euro is made up of 100 cents. A cent is sometimes called a Eurocent, although this isn't commonly referred to as such.
The introduction of the Euro took place after years of indecision and controversy among the members of the European Union. Just as the citizens of some countries were strongly in favour of getting rid of their own currency and using the Euro, others were strongly against the idea because they feared what the overall effect would be on the stability of their own country's economy.
Twelve countries joined the Euro when it was first launched, with another three having joined very recently. Perhaps the most notable country not to have joined is the UK, which has yet to have a referendum on the matter, although many Britons are opposed to ditching the pound in favour of the Euro.
When the currency came into use during 2002, there was a period during which the new currency and the existing one in each country were both used. After a brief period the old currency was withdrawn from circulation. Among the countries which said goodbye to their currency during 2002 were Germany and Spain.
The Euro has fared well on the world stage, and is one of the eight strongest currencies in the world, despite being the youngest of all of them. What's more, there are now more Euros in circulation than US dollars. That is quite a feat for such a young currency.
Of the eight main currencies commonly traded on the exchanges of the world, four of them are variations on the dollar. The Australian dollar is one of these.
It is represented in the currency code by the letters AUD, and as with all other dollar currencies each dollar is divided into a hundred cents. While Australia is known as a country with a relatively short history when compared to some others throughout the world, its currency has an even shorter history.
The Australian dollar only came into being on Valentine's Day in 1966. Before the dollar finally made its appearance the British pound was the currency every Australian carried in their pockets. It is perhaps not surprising then that one of the first banknotes of the new currency saw the figure of Queen Elizabeth II prominently displayed on its face. The introduction of the new currency also saw the decimal system come into place in Australia, replacing the previous and much more complicated pounds, shillings and pence.
The Australian dollar is one of the most stable currencies traded worldwide, and is also used by several other islands including Christmas Island and Norfolk Island.
In 1983 it was decided that the Australian dollar should be floated, instead of being pegged against other currencies. The continued strength of its performance - and its position as the sixth highest currency to be traded around the world – stands as a testament to how well the Australian dollar has integrated itself into the world markets. Australian trade is well known for having a good economy which never seems to slump and it is this fact that has made it a popular trade all over the world.
The Japanese Yen is widely thought of as being one of the strongest currencies in the world, and only trails behind the mighty US dollar and the newcomer the Euro when it comes to trading. The true story is much darker than that however, and it doesn't actually have as much strength as some people think. Foreign trade and the production within industries in Japan has had a big influence on the Yen.
The currency code for the Yen is JPY, and its symbol looks very much like a capital Y with two horizontal lines crossing the middle of it. The only country to use the Yen as its currency is Japan itself, which is one of the reasons why the Yen is somewhat fragile compared to other currencies such as the Euro, which is used in many different countries.
The coinage of the Japanese Yen is distinctive in that two out of the six coins currently in circulation have holes through the middle of them. There are also four banknotes in larger denominations, with the ten thousand Yen note being the largest.
The history of the Japanese Yen can be traced back to 1871, where it was introduced as the preferred alternative to the rather complex system of coinage that was being used at the time. The word 'Yen' was used as it translates to mean 'circle' – referring to the shape of all the coins.
While a single Yen can be divided into a hundred sen, the word sen is not in common use anymore. A single Yen is most commonly the lowest denomination of coin that you will see.
While the Indian Rupee is not among the world's top performing currencies, it is still a major one that is extremely well known among people throughout the world. Although India is the prime user of this currency, Bhutan has also adopted it for common use.
It is represented in the currency code by the letters INR, and the most common symbol of the currency as written in English is Rs. Each Rupee is divided into one hundred paisa. The history of the Indian Rupee can be traced back to the 15th century.
Depending on what part of the country you are in, the Indian Rupee is referred to by different names. This is due to the different dialects spoken. The name itself though means 'silver'.
In times gone by currencies were generally referred to as being either of a gold standard or a silver standard. This usually depended on what the coins themselves were made from. Because the Rupee was originally made from silver (hence the name 'Rupee') it did not perform well against those currencies that were of a gold standard. The famous 'fall of the Rupee' relates to this occurrence.
The current selection of banknotes are each designed to be a slightly different colour, and also go up slightly in size as each banknote increases in value. There are seven banknotes currently in common circulation, along with five coins. Three other coins are also legal tender, but are no longer that common.
The Russian rouble – or ruble, to use its alternative spelling – is very similar to the Indian Rupee in that while it isn't one of the big performers on the world exchange, it is one of the better known currencies that most people are familiar with.
The subunit of the rouble is the kopeck (also known by different spellings) and there are one hundred kopecks in a rouble. While it is known as the currency of Russia, it is also used by South Ossetia (part of the Georgian state) and Abkhazia.
Much like the Euro, the Russian rouble itself has a relatively short history. While its roots are several hundred years old, it was the demise of the Soviet Union that saw the rouble we know today come into being.
There are currently eight coins and seven banknotes in circulation in various denominations. The banknotes are all distinctive by the fact that they have a relatively large white area in the middle of each side of the note, with a more colourful centre.
All the major currencies of the world have their own intriguing history. The fact that some currencies are hundreds of years old and others are barely even into double figures does not have any bearing on the power that these currencies can have in the world as a whole.
It is also clear that the size of the country wielding each currency does not have much of an effect on how powerful that currency is overall. While the Euro spans several countries the Swiss franc has a much smaller base from which to operate, and yet it still holds its own as a dominating world currency.
The nature of the world's markets means that each monetary unit varies in value from day to day. But for the foreseeable future it seems that the top eight currencies are likely to stay just where they are.