The Most Stable Currencies in Europe

FXOpen

Europe has a variety of economic centres, each with its own unique advantages. The region is home to several stable currencies, which are backed by strong economies and strict currency regulations. In this FXOpen article, you will learn about the top stable currencies of European nations and the reasons behind their performance.

6 Most Stable European Currencies

There are many reasons for currencies to remain strong and stable over the years. The most stable currencies are not only a reflection of robust economies but also sound fiscal policies and political stances.

The Swiss franc, for example, is considered the most stable currency in the world, thanks to the strong economy of Switzerland and the country’s political environment. The euro has also developed into one of the strongest and most stable global currencies.

This article compares all the Europe money to USD, as it serves as a benchmark for assessing the value of other currencies.

*The rates are effective on the 31st of October, 2023.

1. Swiss Franc (CHF)

Exchange rate: 1 CHF = 1.108 USD

The Swiss franc is considered one of the strongest currencies in Europe. The official currency of Switzerland and Liechtenstein is the most stable globally. It’s a safe-haven asset for traders and investors. The country is renowned for its low unemployment rate, high standard of living, and a well-diversified industrial base. The Swiss economy is driven by exports of goods and services, particularly in the pharmaceutical, chemical, and banking sectors.

One of the key factors contributing to the stability of the Swiss franc is the independence of the Swiss National Bank (SNB). The SNB is responsible for monetary policy, and it exercises its role with the utmost care and precision. Switzerland’s conservative approach to financial stability and its strict policy of inflation targeting help the franc maintain its strength. The CHF is a safe-haven asset, and traders tend to buy it during times of economic uncertainty.

2. British Pound (GBP)

Exchange rate: 1 GBP = 1.22 USD

The stability of a currency like the British pound can be attributed to several factors. The United Kingdom has a long history of political stability and a well-established legal system. Also, the country has a relatively stable and developed economy with a diverse range of industries, including finance, manufacturing, and services.  London is a global financial hub, and the UK has a significant presence in the international financial markets.

The Bank of England, the central bank of the United Kingdom, is known for its commitment to maintaining price stability. It has a clear inflation target and takes measures to achieve it. If you want to learn why the British pound is stronger than the US dollar, read our article.

3. Euro (EUR)

Exchange rate: 1 EUR = 1.065 USD

The second most stable currency in Europe is the euro. It is used by 20 of the EU member states. It’s also the second most widely used currency in the world, with an average share of around 20% across various indicators of international currency use. The euro’s global appeal is associated with the strong Economic and Monetary Union. The stability of this currency can be explained by the strong economy, currency regulations, and resilience.

The EU is the world’s largest trading bloc, and its economy is driven by the export of goods and services. The European Central Bank controls the monetary policy of the Eurozone by maintaining price stability via interest rates and control of the money supply. For example, in 2022-2023, despite a series of new shocks, including geopolitical risks and high inflation, the international role of the euro remained resilient.

4. Swedish Krona (SEK)

Exchange rate: 1 SEK = 0.090 USD

The Swedish krona is also considered a safe-haven currency. This is due to Sweden’s political stability, powerful economy, and low levels of public debt. The Swedish economy is driven by the export of goods and services, particularly in the automotive, telecommunications, and pharmaceutical sectors. It is also characterised by a broad industrial base, including the manufacturing and technology sectors.

Additionally, Sweden’s commitment to fiscal responsibility and prudent monetary policy, managed by the Sveriges Riksbank, the Swedish central bank, has contributed to the stability of the krona. The country’s adherence to inflation targeting as its primary monetary policy objective and its strong rule of law underpin the currency’s overall strength.

5. Norwegian Krone (NOK)

Exchange rate: 1 NOK = 0.089 USD

The Norwegian krone, or NOK, is another European currency that consistently ranks among the most stable in the region. Norway’s robust economy, rich in natural resources such as oil, gas, and fisheries, is a primary driver of the currency's strength. The country has managed its resource wealth through its Government Pension Fund Global, commonly referred to as the Norwegian Sovereign Wealth Fund.

The Central Bank of Norway is committed to maintaining the stability of the krone. It employs an inflation-targeting framework and consistently adapts its policies to meet the changing economic conditions. Moreover, Norway’s political stability and responsible fiscal management contribute to the stability of NOK.

6. Danish Krone (DKK)

Exchange rate: 1 DKK = 0.142 USD

The Danish krone is the currency of Denmark, as well as the autonomous territories of Greenland and the Faroe Islands. Denmark, a country known for its high standard of living, strong welfare system, and prosperous economy, has a well-established reputation for fiscal prudence. Its economy is marked by a highly developed agricultural sector, manufacturing, and a thriving services industry.

The Danmarks Nationalbank plays a huge role in ensuring the stability of the krone. The bank operates with a focus on maintaining a stable exchange rate policy. Denmark’s political environment, economic fundamentals, and welfare system further reinforce the position of the DKK as one of the most stable currencies in Europe.

Using the USD in Europe

Using the US dollar in Europe is not uncommon. It is widely utilised in the region, particularly in international trade and finance. According to the ECB, the share of the US dollar as an invoicing or settlement currency for extra-euro area trade remains stable.

Converting US dollars to euros is a fairly simple process, and there are various ways to do it. One way is to use a currency conversion calculator (converter of the US to Europe’s currency), which provides an estimate of the exchange rate. Another way is to use a trading platform that offers low fees, tight spreads, and fast order execution. The TickTrader trading platform provides competitive exchange rates, so you can consider using it.

Final Thoughts

The British pound, euro, Swiss franc, Swedish krona, Norwegian krone, and Danish krone are some of the most stable currencies in Europe. These currencies are a reflection of strong economies, fiscal policies, and effective monetary management. They not only provide economic stability within their respective countries but also play important roles on the global stage.

As we move forward, it’s crucial to keep an eye on the most stable European currencies. And if you are interested in trading them, you can open an FXOpen account and join our large community of traders.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Trader’s Tools

Chart Pattern Cheat Sheet by FXOpen Japanese Candlestick Cheat Sheet by FXOpen Tweezer Candlestick Patterns for Trend Trading Mastering Multiple Timeframe Trading Strategies Three Triangles: How to Identify a Trend Continuation

Latest articles

Financial Market News

Weekly Market Wrap With Gary Thomson: CAC 40, AUD, OIL, AMAZON

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of  FXOpen UK, as he breaks down the most significant news reports and shares his expert insights. European Stock Markets on

Commodities

Price of Gold Briefly Exceeded $2,050 per Ounce

In addition to new records in the stock markets, the reaction to yesterday's news about inflation in the US was also a decrease in government bond yields and a rapid rise in the price of gold — the cost of XAU/

Indices

Nasdaq-100 Price Hits All-time High after 4 Straight Months of Gains

The Nasdaq-100 index is holding above 18,000 today following yesterday's bullish momentum, fueled by inflation news. The PCE consumer spending index amounted to 0.4% on a monthly basis, which was in line with analysts' expectations. A year ago,

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.