Israeli Shekel, the currency with the biggest appreciation against the dollar

Several global currencies have recorded double-digit gains against the US dollar in the past year. Changing capital flows, changing expectations about monetary policy and improving domestic fundamentals have played a role in this development, according to visualcapitalist.com, which, in partnership with Terzo, presents the ranking of currencies with the biggest gains against the US dollar.

• The biggest appreciations

The cited source analyzed countries with an annual GDP of $ 250 billion or more and ranked the performance of their currencies against the US dollar, over the past year.

The Israeli shekel tops the list, up 20.2% year-on-year against the US dollar. The Bank of Israel governor attributes this to the resilience of the Israeli economy in the face of the Middle East conflict and the solid performance of exports. Israel has also seen strong foreign direct investment, which has boosted demand for the shekel. The Colombian peso and the South African rand have also posted strong gains, rising 19.7% and 16.4% respectively against the US dollar over the past year. The Mexican peso follows closely, up 16.4%, supported by higher interest rates compared to the US, record foreign direct investment and a booming tourism sector. Next, in positions 5-10: the Australian dollar (+14.8%); the Brazilian real (+14.5%); the Nigerian naira (+13.5%); Norwegian krone (+12.7%); Kazakh tenge (+12.3%), Malaysian ringgit (+11.2%).

• A weaker US dollar

A major factor in currencies around the world gaining value against the US dollar is that the US currency itself is weakening.

Analysts say the decline is partly due to market concerns about the unpredictable policies of the US administration. In early 2025, expectations of further interest rate cuts by the Federal Reserve (Fed), which has prompted investors to seek higher yields elsewhere, also pushed the dollar lower, according to the cited source.

• What a weaker dollar means for global markets

When the US dollar weakens, it changes the way money and trade flow around the world.

For example, American products become cheaper for other countries, which can help American exporters. At the same time, companies in other countries (with stronger currencies) may find it difficult to compete with American goods, the source notes.

For investors, a weaker dollar can increase the value of investments in other countries. Even if those investments don't increase by much, they may still be worth more when converted back into U.S. dollars, simply because the exchange rate has improved.