Currency signs are some of the world’s most recognizable symbols – at least the high-profile ones. The dollar sign ($) is long-established and well-known, but the Euro is a relatively young currency and its symbol is new to the world.
In reality, each currency has multiple symbols: a visual symbol that’s usually just one sign, and a code and number assigned by the ISO 4217 international currency standard. This code identifies the currency in the international banking system, the foreign exchange market, on international airline tickets, and in international payments of all kinds. In this standard, the American dollar goes by USD or 840.
Today, we’re going to talk more about the currency symbols that often reflect local heritage, historical tradition, and culture factors, as opposed to the ISO codes which are completely technical.
The US Dollar ($) – or the Spanish Dollar?
The dollar was originally the name of the currency used in the Spanish settlements in America, as far back as the 16th century, although the $ symbol didn’t show up until the 18th century. There are a number of different legends about how the symbol was created: some say it’s a stylized monogram with the letters PS, which was an abbreviation for Potosi in Bolivia. Others believe the symbol is a combination of the letters U and S, placed on top of each other. Or it could be the letter S combined with a representation of the pillars at the entrance to the Strait of Gibraltar to hint at Christopher Columbus’ voyage to America. Whatever it means, it is the symbol for the world’s most traded currency.
The Euro (€) – the (Sort Of) Democratically-Chosen Symbol
The Euro, the newest of the major global currencies, was established in 1996. Before it was released, a contest was held to choose a symbol for the new currency. Thirty-two designs were entered in the first round of the contest and were narrowed down to ten before being presented to the public. The public vote narrowed it down to 2, and the final winner was chosen by a special commission. The whole contest was defined as an “internal process” so access to the original contest entries isn’t available.
The symbol is based on the letter E, for Europe, and is designed to hint at the Greek letter Epsilon and the culture of ancient Greece, widely seen as the cultural forebearer of modern Europe. The two lines that intersect the letter E symbolize the currency’s stability.
The Pound (£) – A British Currency with Roman Roots
The history of the Pound symbol is relatively straightforward: it’s a heavily stylized letter L with a line through it. L is the first letter of Libra, which is the Latin for the pound unit of weight measurement, used as early as the Roman empire. The word sterling (as in Pounds Sterling) comes from sterling silver, which is silver with a minimum millesimal fineness of 925 – in other words, it is at least 92.5% pure silver. A Pound Sterling was original worth exactly one libra of 92.5% pure silver.
The Japanese Yen (¥), Chinese Yuan (¥), Philippine Piso (₱), Korean Won (₩), and the Indian Rupee (₹)
The letter Y is for two Asian currency giants including the Japanese Yen, which is the world’s third most traded currency. You might also be interested to learn that the $ symbol is used to mean 100 Yen, so 1500 Yen can be written as 1.5$. Also using a Y symbol, the Chinese Yuan represents the world’s second-largest economy.
The symbol that looks like a P is the Philippine Piso. In Spanish, piso means weight and was the name of the Spanish currency. Today, it’s used for numerous currencies in countries that have been under Spanish control or influence. Spain ruled the Philippines until 1898 before it was conquered by the US and eventually gained independence.
The W represents both the North and South Korean currencies. These two neighbors may be divided on most issues, but they can at least agree on what to call their money.
The Rupee is the last currency on our list. Used by more than a billion Indian citizens, it’s also the name of a number of other currencies around the Indian Ocean. The currency’s symbol is Rp or a symbol based on the letter R with the vertical line removed from the left side.
There are more than 100 currencies used around the world, representing the economies of almost 200 countries and territories. Currency rates represent an additional complication when investing. Even if you invest only on American stock exchanges, you are likely to invest in companies that do business in other countries. Foreign exchange rates can affect your investment because they can affect the company’s business and the strength of the US Dollar.
Having some insight into foreign currencies can give you a deeper understanding as an investor and it’s another great way to get to know the world around you. Investing lets you be a part of your economy and society. Understanding currencies lets you take that one step further - becoming a part of the international marketplace.