Australia, Mexico, New Zealand, and Singapore are among the countries that join the U.S. and Canada in using the “$” symbol to represent their currency. Other currency symbols include “€” for the euro, the currency used in 19 out of 27 European Union member countries; the symbol for the Japanese yen is “¥”; the Norwegian krone is typically expressed with “kr” followed by the amount.
How Currency Symbols Work
Currency symbols are as old as currency itself. However, countries continue to establish new currency symbols. For example, the Indian rupee graphic (₹) was adopted by the government of India on July 15, 2010. Prior to its adoption, the symbol most commonly used for the rupee was “Rs” or “Re.” The Indian rupee symbol is an allegory of Indian ethos. It is a combination of Devanagari “Ra” and the Roman capital “R,” with two parallel horizontal stripes running at the top representing the national flag, and the “equal to” sign. The symbol was chosen from thousands of designs received by the Ministry of Finance through an open competition among resident Indian nationals. The winning design was created by a post-graduate design student named Udaya Kumar. The euro (€) was named in 1995 but was introduced to global financial markets on Jan. 1, 1999. It is the official currency of 19 of 27 EU countries. The symbol is based on the Greek letter epsilon (Є) and also represents the first letter of “Europe,” with two parallel lines signifying stability.
The Origination of the Dollar Symbol
One of the most widely recognized currency symbols is the dollar sign, used by more than 20 countries. The most commonly accepted explanation of the origin of the dollar symbol ($) is that it evolved from the Mexican or Spanish “P” used to represent pesos or piastres. A study of old manuscripts has led to the theory that the “S” eventually was written over the “P,” which ultimately morphed into the “$” symbol used today. One reason so many countries use this symbol is that the U.S. dollar was widely adopted throughout the 20th century as the leading currency in international trade and debt contracts. Primary commodities are generally priced in dollars on world exchanges, and central banks and governments hold the bulk of their foreign exchange reserves in U.S. dollars. The British pound served as the primary international currency through the 19th century and the first half of the 20th century. The pivot to the U.S. dollar coincided with the decline of British economic power in the 20th century and the rise of U.S. economic influence.
Currency Symbols vs. Currency Codes
In addition to currency symbols, each currency has a currency code recommended for use by the International Organization for Standardization (ISO). While many currencies use the same character, each currency has a unique currency code, which may be represented numerically and alphabetically using three digits or three letters. ISO 4217 is the standard that lists alpha codes for each country. It’s based on another ISO standard, ISO 3166, which lists the codes for country names. The three-digit numeric code is useful in countries that do not use Latin scripts and computerized systems. For example, the U.S. dollar is represented by “USD” and the numeric code 840. One everyday use of currency codes lists the exchange rate between two currencies. The currencies are listed in pairs alongside a numeric value. If, for example, you see USD/CAD 1.28378, that means $1.28 in Canadian dollars equals $1 U.S. dollar.
What It Means to Individual Investors
Currency symbols help identify and differentiate between currencies. If you’re dealing with currencies other than the country you live in, say when you’re on a vacation abroad or if you decide to invest in the currency markets, knowing and understanding currency symbols can be extremely useful.
