Want Some Good News? Here comes the dollar!

Strong dollar

Over the past couple years we’ve developed pretty thick skin when discussing the weakness of the dollar versus the euro or British pound.

Just this summer the euro hit an all-time high of $1.60, while the overwhelming strength of the pound introduced the budget traveler’s nightmare of $6 Cokes in London.

My, how times have changed.

As of this morning (October 22, 2008), the euro is worth $1.28 and the British pound is down to $1.62. Say what?

To put this sudden drop in exchange rates in context, the euro has not been this low since November 2006, and many economists expect it to decrease further in coming months.

While today’s euro exchange rate isn’t as low as the currency’s record low against the dollar, the stronger dollar does offer immediate relief to American tourists abroad, as well as a bit of happy economic news in an otherwise chaotic economic climate.

Tell us: How strong will it get?

How much stronger do you think the dollar will become during the next year?  Will a stronger dollar influence your decision to take a trip to Europe? We’d love to hear from our fellow Cheapos. Please add your comments below!

Photo from davidrcichon.com.

About the author

Pete Meyers
About the author: An Ohio native, Pete Meyers was bred on family road trips and the Beach Boys. When not working at EuroCheapo HQ in NYC, Pete likes to be found eating bouillabaisse anywhere in the south of France.
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Cheapo Comments

16 Responses to “Want Some Good News? Here comes the dollar!”
  • Sebastien says:

    I think the dollar will remain more or less at the same level for the next 12 months. My guess is that at some point the euro will be worth $1.15!

    - Seb

  • Reid says:

    I’m heading to France in the spring regardless of the exchange rate. After all, I went to london last spring when the dollar was way down, so it’s not a big deal. I think it’s all in the planning.

    That said, I think the Dollar will probably get stronger, which says less about our dollar than it does about the european economy.

    Reid

  • The Operator says:

    Am I the only one who thinks this can’t last? I bet its back to $1.50 by Christmas. Sorry to put out the party.

  • Emily says:

    I would say most certainly the value of the dollar impacts not necessarily IF we would go to Europe, but where we would go, where we would stay (Cheapo Hotels all the way!) and how long we might travel for. I think any savvy traveler goes where they need to go regardless of silly little things like monetary units. . . but it just means you need to do more research and have a plan, which can take away a BIT of the whimsical fun of seeing the world.

  • melinda says:

    I think this is all news to be excited about. I’m currently planning a trip to eastern europe and am going to use a lot of your other budget tips to help me with overall costs.

  • JR says:

    I think what’s really goign to be interesting is what happens to the dollar after the election. My inclination is that it will get even stronger if Obama wins, because I think he has smarter people working on his economic policies than the other guy…

  • melinda says:

    Totally agree with JR. Go Obama!!

  • To put this in perspective, a strong dollar today is good for the American traveler, but not good for America as a country. This is because a robust dollar makes it much more expensive for foreign countries to buy US goods, at a time when our economy is desperately in need of customers.

  • Pete Meyers Pete Meyers says:

    @ melinda – have a great trip! Where will you be visiting?

    @ TravelInsuranceLady – yes indeed, there are many layers to the exchange rate debate. But anything that helps alleviate usage of the buzzword “staycation” gets our support!

  • JR says:

    TravelInsuranceLady, I agree that a really strong dollar isn’t necessarily good for US exports, but we’re only talking about a euro at $1.25 or whatever.

    Remember back in 2002 when the euro was less than a dollar! I think the dollar can still get stronger without much of an impact on the national economy. But I’m no economics expert, so what do I know!!!

  • As a traveler and travel podcaster it was sure good news to me.

  • honcho says:

    Who knows what’s going to happen with this economy! The crisis has gone global. My feeling; take advantage of the exchange rate while you can. Madrid, here I come…

  • Trekkie212 says:

    I agree about the “staycations” Pete! They’re lame. At least get in the car and go somewhere, right? Better yet, find cheap airfare to Europe (kayak is a good site) and head out of dodge. I think we’re seeing the worst of it all right now too.

  • student abroad says:

    good news, though i agree with what people said already. the fluctuating exchange rate won’t keep me from traveling around europe…thanks to your budget tips i think it will be pretty easy to cut costs and still have a nice trip.

  • Pete Meyers Pete Meyers says:

    @ Chris – I just subscribed to your podcast. And best of luck with the upcoming Travel Podcast Awards!

  • I am a writer and traveler who often travels to Italy with groups of my readers. I had to cancel my October trip to Michelangelo’s Italy — too many people were nervous about the exchange rate. This will make it much easier for my readers to travel to Italy with me in 2009. I am a cock-eyed optimist!

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