Top 5 strongest currencies in 2015

(Change against US $ at 12 December 2015 against rates one year ago)

1. Bitcoin (XBT) +21%
2. Israeli Shekel (ILS) +2%
3. US Dollar (USD)
4. Swiss Franc (CHF) -2%
5. Japanese Yen (JPY) – 2%

Bottom 5 weakest currencies in 2015

1. Venezuelan Bolivar (Black market rate) -78%
2. Ukrainian Hryvnia (UAH) -34%
3. Brazilian Real (BRL) -33%
4. South African Rand (ZAR) -31%
5. Colombian Peso (COP) -28%

The FX markets in 2015 have been defined by the De-Risking phenomenon: investors have fled from risk into the main hard currencies, namely XBT(Bitcoin), USD, CHF and JPY. They have retreated from VEF, UAH, BRL, ZAR, COP, RUB.

XAU (Gold) weakened somewhat, a signal perhaps that it is losing its safe haven status.

Bitcoin (XBT)

Note that the money used in the world’s freest financial system — Bitcoin — has appreciated the most, and the money used in the world’s most Socialist and regulated economy — Venezuela — has lost the most value.

Bitcoin was also the world’s strongest currency in 2010, 2011, 2012 and 2013. (But in 2014 it was the world’s worst performing currency.)

n.b. Table shows 37% appreciation (compared to 21% in ‘Top 5 strongest currencies’ table, because base used is 1 January 2015 price of $314 and not 12 December 2014 price of $355.)

Data

Currency Data from Economist for 10 December 2015.

Data for Argentinian Black Market rates from @DolarBlue on Twitter.

Data for Black market Venezuelan Bolivar from www.dolartoday.com.

Graphs

I have graphed the complete results. Venezuelan black market bolivar excluded from graph. Important currencies are in red. (G7 and BRICs and Gold.)

Best and worst performing assets in 2015

There’s an argument to be made that Bitcoin is the top performing asset in 2015. Since 1 January it has increased from $314 to $431, i.e. by 37%. The Economist identified Hungarian equities as the best-performing asset of 2015, which increased by 34%.

Big Mac Index

Leaving Bitcoin aside, here is a quick update on The Economist’s Big Mac Index as it stands at December 2015 by my calculations. It was last updated by The Economist in July 2015, with July 2015 results here:

The results from my own calculations performed on exchange rates as at 12 December 2015 follow.

Most under-valued currencies (cheapest Big Macs) at December 2015

(Under-valuation against $)

1. Venezuela (black market rate 920 Bolivars/dollar) -97%
2. Ukraine -70%
3. Russia -68%
4. South Africa -66%
5. India -64%

A Big Mac bought in Venezuela with black market Bolivars costs the equivalent of $0.14.

The situation in Venezuela is crazy. There’s an interesting travel account hereby The Broke Backpacker who describes his experiences buying money on the black market. And more here.

Most over-valued currencies (most expensive Big Macs) at December 2015

1. Switzerland +37%
2. Norway +11%
3. Sweden +7%
4. Denmark +6%
5. US 0 %

Read more : Bitcoin: the world’s strongest currency in 2015. (And 2010, 2011, 2012, 2013)