How to choose the right hard currency: From the dollar and euro to the plucky pound

Once upon a time, the dollar ruled the world.

Take note: dollars still dominate (AFP/Getty)

It used to be said that all the international traveller needed was a passport and a plentiful supply of US currency: every local trader knew the value of their own money against the mighty dollar, and therefore would readily accept American bills (though possibly at a rate calibrated to offer them a distinct advantage).

That calculation still applies in many of the world's nations: much of Africa, Latin America and the Caribbean regards any currency other than the US dollar with a certain amount of suspicion.

Some currencies, such as the UAE dirham, are locked to the dollar at a fixed rate. When Dallas and Detroit get more expensive for British travellers, so too does Dubai. Many English-speaking Caribbean nations are similarly linked, while the Chinese yuan also keeps pace with the dollar.

Several countries are so enamoured of the dollar that they have made it their official currency. Panama, a country carved out of Central America by the US, pretends to have its own money, the balboa, but in practice it's all American. Ecuador, El Salvador and Zimbabwe have gone for the greenback this century: the regime in Harare threw in the financial towel when hyper-inflation meant a beer cost several trillion local dollars.

Yet in some of the countries of Eastern Europe that have not joined the euro, the euro prevails – as it does in parts of the former Soviet Union where the deutschmark was once all-powerful. The French- speaking Caribbean, as well as parts of North, West and Central Africa formerly ruled by France, all shifted their allegiance from francs to euros when the single currency came into existence.

Even the plucky pound finds favour in some locations, notably the remaining fragments of British influence from Gibraltar to South Georgia.