Mercer's Worldwide Cost of Living Survey 2008 measures the cost of 200 items, including housing, transport, food, clothing and household goods and from this devised a score to determine the most expensive place to live.
While New York was the only North American city to feature in the top 50 (at number 22 with 100 points), Moscow was well and truly ahead with a score of 142.4.
Yvonne Traber, a principal and research manager at Mercer, commented: "Current market conditions have led to the further weakening of the US dollar which, coupled with the strengthening of the Euro and many other currencies, has caused significant changes in this year's rankings.
"Although the traditionally expensive cities of Western Europe and Asia still feature in the top 20, cities in Eastern Europe, Brazil and India are creeping up the list. Conversely, some locations such as Stockholm and New York now appear less costly by comparison."
Asia's top ranking city of Tokyo pushed into second place dropping London to third costliest city, although London still remains the most expensive city in Europe.
Asia's other costly contenders include Hong Kong (6th place) and Singapore (13th place).
London still showed its desirability through some ultra-expensive rental prices, with an average £2,500 a week for a luxury two bed apartment topping even that of Moscow, which averaged £2,293 a week.
Other European cities including Prague, which jumped from 49th to 29th have also done well thanks to a strengthening of the euro and other European currencies against the dollar.
But while the weak dollar has strengthened some European currencies, the reverse holds true for Dubai and Abu Dhabi, Since last year Dubai has dropped 18 places to rank at number 52, while Abu Dhabi has fallen 20 places to 65th position.
On the South American front, the Brazilian city of Sao Paulo claimed the highest rank ( 25), followed by Rio de Janeiro at number 35.Despite this, South America still maintained some of the least expensive cities worldwide.
