Best performing currencies are those that have continued to gain in value since the introduction of the U.S. dollar. That’s right, just about everyone today is talking about the United States. For obvious reasons. But it isn’t just the U.S. that benefits when discussing best performing currencies; it’s the entire planet.
If you’re an investor or trader in any market, you have most likely heard the phrase “the international money supply” or “deflation”. When thinking about something as broad and as volatile as a currency, you are likely thinking about deflation. In other words, money in circulation (also referred to as MNCs [Monetary Managers] money) is becoming scarcer as a result of an increasing level of global debt. It has been noted, on a very preliminary note, that deflation may be a prolonged phenomenon but one that eventually will affect a
ll nations (and their respective economies) – not just the United States and Europe.
What is the best performing currency? The answer is not easy, as it varies from person to person based upon their individual goals and objectives. For an investor or trader looking to capitalize on trends in the markets currently available, a long term investment in gold and silver (or perhaps platinum) is highly advisable. Whether you are looking to diversify your portfolio or simply to make more money from whatever assets you happen to be currently invested in, there is likely a precious metal that would fit the bill.
On the other hand, for those of you who need a quick way to make money (or to prevent losses) on any given day, the short term interest rate of a particular country should serve as the determining factor. For example, a nation with a low interest rate such as Switzerland has a very low inflation rate. That is, its national currency is very attractive. That’s why Switzerland consistently ranks among the top five in terms of saving rate. However, if a Swiss citizen were to decide to sell his or her Swiss franc for an equivalent amount in the U.S., that person might find themselves in a serious bind.
If the Swiss decided to sell, they’d have to give up the extremely low monetary value of their currency – which would send them into a financial crisis. Conversely, if they chose to purchase more U.S. dollars, their purchasing power would soar and their nation would experience a significant trade deficit. Therefore, buying other currencies is a strategy that could help minimize these risks while maximizing returns.
Of course, you don’t really want to use a currency that is not strongly supported by its domestic economy. There is a distinct risk that the currency will depreciate versus that of its national currency. This can create a disastrous situation for a particular country, especially if the depreciation is rapid. But, if you carefully monitor the market and choose wisely, you may be able to ride out this fluctuation just fine.