Speculators, hedgers and investors alike utilize currency markets . International corporations or those companies that import and export must also pay careful attention to fluctuations in foreign exchange ( FOREX) rates. Typically, currency prices exhibit low volatility; however, as the first quarter of 2015 draws to a close, it is worthwhile to take a look at the worst performing currencies year to date. (For more, see: A Primer on the FOREX Market.)

The Worst Performing Currencies of 2015 (So Far)

As the U.S. economy recovers, the dollar has strengthened, making it one of the best performers over the last year. This is how other world currencies have fared vs. the dollar.

The Russian Ruble was hit hard in 2014, losing nearly 40% of its value following economic sanctions by the West and low oil prices . So far, in 2015, the ruble itself has remained fairly unchanged, however the ripple effect to former Soviet countries, including Ukraine, Belarus, Azerbaijan and Moldova, has made these nation's currencies among the worst performers so far this year. (For more, see: Is it Time to Buy Russian Rubles?)

Brazil's economy stagnated in 2014-2015, along with a general decline in commodity prices, which it relies on for exports. Political uncertainty and rising inflation has caused the Brazilian Real to lose nearly 20% so far this quarter. (See also: Investing in Brazil 101.)

The euro, the common currency of the Eurozone member nations, has seen its value steadily decline due to persistent economic woes, prompting the European Central Bank (ECB) to begin quantitative easing (QE) efforts in order to jump start the economies there. Furthermore, fear of a Greek exit from the euro and the contagion that would cause throughout the peripheral nations has depressed its value. (For more, see: Risk and Rewards of Investing in the Euro.)

Scandinavian countries, although not members of the Euro currency, are nonetheless intrinsically linked to European economic activity. Sweden and Norway, in particular, who rely on oil production as a large part of their economy have seen their currencies fall just under 10% so far this year, extending losses from 2014. Likewise, the British pound has lost similar amounts. (See also: Will the UK Rescue North Sea Oil.)

Canada and Australia, both traditionally stable economies during economic downturns, have not been able to escape the effect of low oil and commodity prices. The Canadian dollar is down nearly 9% and the Australian dollar down almost 6.5% year to date. The New Zealand dollar, which is closely correlated with the Australian economy has also lost nearly 5% of its value so far this year. (For more, see: Canada's Commodity Currency: Oil And The Loonie.)

It is interesting to observe that some of the weakest performers of 2014 not included in the list above have remained fairly stable in 2015. The Japanese Yen, which lost over 16% due to Abenomics, and the Argentian peso, which was down over 10% last year, are only down modestly this year. The Swiss Franc, which lost around 12% over the past year is actually a bit stronger than the dollar due to Switzerland's controversial decision to de-couple from the euro peg. (See also: The Fundamentals of Abenomics.)

Bitcoin, the digital cryptocurrency that has drawn a lot of attention lately is down around 16% so far this year and down almost 57% over the past year. While this technology is still new and developing, its price volatility has made it not very useful as a means of exchange. There is evidence, however, that much of its spectacular rise in price in late 2013 to over $1,200 per bitcoin was largely due to fraudulent trading and price manipulation at the Mt. Gox exchange, which ultimately collapsed in the process. (For more, see: When Will Bitcoin Soar?)

Currency

YTD Performance

(vs. the US Dollar)

1-year performance

(vs. the US Dollar)

Ukrainian Hryvnia (UAH)

-32.33%

-59.44%

Belorussian Ruble (BYR)

-25.92%

-33.73%

Azerbaijani Manat (AZN)

-25.32%

-25.20%

Brazilian Real (BRL)

-19.31%

-28.35%

Bitcoin (BTC)

-16.45%

-56.88%

Moldovan Leu (MDL)

-14.72%

-26.67%

Euro (EUR)

-11.73%

-23.31%

Czech Koruna (CZK)

-10.93%

-23.47%

Swedish Krona (SEK)

-9.86%

-26.34%

Canadian Dollar (CAD)

-8.54%

-12.57%

Norwegian Krone (NOK)

-7.83%

-26.09%

Australian Dollar (AUD)

-6.38%

-15.19%

Great Britain Pound (GBP) -5.26% -11.33%

New Zealand Dollar (NZD)

-4.63%

-12.92%

Argentine Peso (ARS)

-3.76%

-10.21%

Japanese Yen (JPY)

-0.80%

-16.06%

Swiss Franc

+0.47%

-11.85%

Russian Ruble (RBL)

+0.80%

-39.02%

Source: XE.com, 3/20/2015 

The Bottom Line

The U.S. dollar has strengthened over the past year while weakness in Europe and the former Soviet Union has led to declines in those currencies. Countries that rely on exporting oil and other commodities have been particularly hurt by declines in those prices as well. While the dollar is relatively strong now, it is sure to fluctuate in the future. A strong currency is bad for exporters whose goods become more expensive for foreign buyers, so the U.S. is likely to see mounting pressure from companies who rely on exports, or who do significant business abroad to advocate for a weaker dollar.

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