8 World Currencies That Took a Hit in 2016

Tim Lemke — Tue, 17 Jan 2017 11:00:10 +0000

It's been a tough stretch recently for global currencies. Economic uncertainty, political shake-ups, and other world events have sent the value of currencies down sharply over the past year in many countries. Moreover, the decision of some nations to float their currency on the foreign exchange market has had troublesome results. Currencies in South America have been hit especially hard, but others in Europe and Africa haven't been immune to weakening.

Here are eight currencies that dove in 2016.

1. British Pound

Thanks, Brexit! The UK's vote to leave the European Union stunned the world and sent the pound plunging over fear of the move's impact on the British and global economy. Right now, the British pound equals about $1.23 U.S., or nearly 20% less since June, 2016. The pound was worth $1.50 right before the Brexit vote. It dropped nearly 15% immediately and kept declining before rebounding slightly at the end of 2016.

2. Mexican Peso

In the spring of 2016, one U.S. dollar was worth about 17 pesos, but the value of the Mexican currency has been tumbling ever since. The anti-immigration and anti-trade message coming from Donald Trump during the presidential campaign led to a weakening of the peso, and Trump's election in November made matters worse. The dollar/peso trade is now above 21, marking a 23% decline in value for the peso.

3. Venezuelan Bolivar

The Venezuelan economy is a mess, with massive inflation, shortages of food and medicine, and general mismanagement. This has led to a collapse of the nation's currency, with the value dropping by more than 36% in late March of last year. But accurate data from Venezuela is so hard to come by that the actual value of currency is anyone's guess.

4. Argentine Peso

Argentina's currency began falling right at the start of 2016, then rebounded in the summer before enduring a long decline since. The U.S. dollar is now worth about 16 pesos. That means the value of the peso is down about 17% since this time in 2016. This drop is largely blamed on the decision to begin floating the currency on the foreign exchange market. The move was supposed to encourage foreign investment, but that has yet to bear out, and the currency has taken a hit as a result.

5. Turkish Lira

National security fears and inflation have hammered Turkey's currency, which hit a new all-time low in early January. The currency began tumbling last spring, and is now off more than 23% since a peak in April. Interest rate hikes in the U.S. have created additional pressure; it now takes about four lira to equal a U.S. dollar.

6. Egyptian Pound

Egypt's currency tumbled in October, after the nation's government announced it would free float its currency. The Egyptian pound's 45% loss in a single day is believed to be a record. The pound had been trading at an 8:1 ratio to the U.S. dollar, but now it takes 18 pounds to make a dollar. Observers say that in the long run, a weaker currency could boost exports and tourism, but there is concern about inflation in the short term.

7. Nigerian Naira

Nigeria also free-floated its currency in 2016 in an effort to lure investment, and results were not quite as bad as in Egypt. After being pegged to the dollar for more than a year, the naira dropped 30% in a day in June. One U.S. dollar is now worth about 315 naira, compared to 199 naira before the slide. To make matters worse, a decline in the value of oil has not helped the currency for this OPEC nation.

8. Euro

General concern about the European economy has depressed the value of the currency used by more than 330 million people on the continent each day. One euro is now worth about $1.05 U.S. It had been trading above $1.15 before enduring a long, slow decline over the second half of 2016.

This article is from Tim Lemke of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Here's How Brexit Could Affect Your Travel Plans

Brittany Lyte — Mon, 25 Jul 2016 10:00:12 +0000

Britain is divorcing Europe, and though the planned separation is a multiyear process, the repercussions are already being felt. So far, the pound is collapsing, the dollar is acquiring value, and the euro is experiencing a slump. But what does it all mean for your travel plans? If you've got your sights set on a hop across the pond in the near future, here's what you need to know.

You'll Get a Big Bang for Your Buck in Britain

When Britain voted to exit the EU, the British pound plummeted 8%. Let's put that in perspective: Overnight, the pound's worth dropped below the relative worth of the American dollar back in 1985. It was the currency's single worst day on record. The good news, however, is that the dollar-pound exchange rate is the best it's been in three decades, giving Americans traveling in Britain big purchasing power.

If you've never seen the land of Shakespeare and fish and chips — or if you're due for a revisit — now's your chance to do so at a better-than-ever price. Of course, this doesn't mean that your British vacation will be cheap. Even with the Brexit market turmoil, you'll pay far more to sightsee in the birthplace of the Beatles than you would to travel to a country with lower living standards, such as Mexico. But if a trip to Britain is already on your list, now is a great time to pull the trigger.

Travel to European Countries Will Also Be Cheaper

When the value of the British pound dropped, so, too, did the worth of the euro. Down, down, down it went, settling slightly lower than the dollar. This essentially puts all trips to Europe on sale. Not a huge sale, but a sale nonetheless. Americans traveling to Portugal, for example, will have nearly 1% more purchasing power, according to an analysis by Vox. (Hey — every little bit helps, right?) This is especially welcome news considering that travels to Europe were previously predicted to be more expensive this summer than last.

Travel to U.S. Destinations Could Drop in Price

If all of Britain is "on sale" to Americans, the inverse is also true: Travel to the U.S. is more expensive than ever for Brits. If this climate persists, it's likely that many British tourists will opt out of U.S. travel until the pound-to-dollar exchange rate stabilizes. It's yet to be seen, but this scenario opens up the possibility of cheaper travel within the U.S. (Think New York, Miami, Los Angeles).

"If British tourists, because of currency fluctuations, change their plans or don't come to U.S., you may see some ability to get some better prices in some cities," Mike Stitt, the North American president of Travelzoo, told The New York Times. "We're seeing a little of that effect now with the Canadian travelers. As their currency has plummeted against the dollar, Canadians are staying home."

Airfare Specials to London May Become Easier to Snag

British Airways kicked off the uncertain era following Britain's EU split with a Brexit fare sale. Pricing economy fares from New York to London for as low as $639 round trip, the airline used the country's economic turmoil as a hook to lure in more American tourists. "Your dollar has never gone further," the airline trumpeted on its Twitter account. It's yet to be seen whether other airlines will follow suit. But it's worth keeping your eyes peeled for Brexit-inspired discounts.

Flights From Europe to Britain Could Climb

In the wake of Brexit, the low-cost Irish airline Ryanair said it would be unlikely to deploy new planes on British routes. Instead, the airline said it will funnel its finances toward its European routes. "It's unlikely we will base any additional aircraft in the UK in 2017 as they will be allocated to European Union airports instead," a Ryanair spokesperson told The Irish Times. It's unclear whether other airline carriers will follow suit. But if they do, the price of flights to Britain could very well climb — especially if more low-cost airlines curb their commitment to Britain.

Longer Airport Waits Could Be On the Horizon

A few years out, when Britain's divorce from the EU is finalized, there will be a major change at British airports: Citizens of the European Union will be funneled to the international customs line — the same line that's used by Americans. This could lead to longer wait times. And, if you're traveling through a British airport to a final destination in Europe, you'll likely have to claim and recheck your luggage while going through immigration. A small hassle, perhaps, but who needs another hassle at the airport?

Assuming the UK follows through with Brexit, what ramifications do you expect?

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This article is from Brittany Lyte of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

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