2016 Vacation Guide (The Currencies That Will Stay Depressed Against the USD)

"A bank is a place that will lend you money if you can prove that you don’t need it"

-Bob Hope

The Fed finally did it. Janet and the gang raised rates for the first time in nearly a decade, confident that the U.S. economy could continue to rebuild with less effort from the central bank.

This is impressive in a way, and concerning in another, that rates at home are increasing while the other major economies continue to provide financial stimulus to prop up their struggling economies. The central banks of Europe and China are fresh off easing measures and the Bank of Japan has kept their rate at 0% since 2011.

The continued strengthening of the dollar against these major economies will most certainly impact manufacturing and exports, but on the positive side it is getting even cheaper to travel abroad. We dedicated this week’s Market Call to identifying the currencies that have the greatest likelihood of staying depressed, or falling even further, in 2016, and in turn the best spots to get the most for your money for a trip. As it turns out, they are all amazing places so plan accordingly!

We used the futures contract prices for a couple dozen of the largest countries’ currencies, and looked at both the 6 month and 1 year price trends of each. The top destination for your money is by far Brazil.

Brazil

We found 18 similar instances of the current 1 year price trend in the Brazilian Real’s history (Symbol: BR), and on average the currency declines another -10.7% in the next year. 13 of the 17 matches are down in the next 1 year.

We found 28 similar instances of the 6 month price trend, and on average the currency declines another -2.9%.

Rio is amazing. Plus, the Olympics are there in 2016 so it seems like a no brainer if you can find a place to stay. Here are the top 10 things to do according to U.S. News & World Report: http://travel.usnews.com/Rio_de_Janeiro_Brazil/Things_To_Do/

South Africa

We found 28 similar matches to the current 6 month price trend in the South African Rand (Symbol: RA), and on average the currency falls another -4.8% in the next 6 months. In 22 out of 28 historical matches (79.6%), the currency falls further.

There were 12 matches for the 1 year price trend, and the currency rises on average but only a meager 2.4%. Plus, 7 out of the 12 matches are still down in the next 1 year so there’s a good chance the rate will still be in your favor.

Here are the top 10 things to do in South Africa according to TripAdvisor: http://www.tripadvisor.com/Attractions-g293740-Activities-South_Africa.html. The Cape of Good Hope and a Safari should be high up on your list.

Canada

An easier jaunt perhaps?

We found 13 similar matches to the current 6 month price trend in the Canadian Dollar (Symbol: CD), and on average the currency falls another -0.6% in the next 6 months. The currency falls further in 8 of the 13 historical instances (61.5%) in the next 6 months.

There were 14 matches for the 1 year price trend, and the currency is down on average -0.9% in the next year with 10 of the 14 matches being down (72.4%).

For both the 6 month and 1 year price trends, the 2009 recovery in the Canadian Dollar save the average declines from being much more significant.

Can’t go wrong with Toronto, Montreal and/or Quebec. Here it is from the Brits perspective: http://www.telegraph.co.uk/travel/destinations/northamerica/canada/11708881/Top-10-best-cities-to-visit-and-things-to-do-in-Canada.html

Happy Holidays and Safe travels!