Question: I’m going to Europe on vacation this summer, how can I feel less of a pinch from the dollar falling as much as it has against the pound and euro?
Answer: Traveling to Britain these days means your dollar is really worth about 50 cents. Going to France, Germany, or one of the other 11 European Union countries that use the euro? There the greenback is worth about 73 cents. It has been tough times these days for the U.S. dollar, which has touched multiyear lows against some of the world’s most widely held currencies.
Most brokerages expect the dollar will continue to weaken this summer against the euro and the pound. But that’s not expected to stop travelers – and there are steps Americans can take to lessen the brunt of an unfavorable foreign exchange rate.
“Americans are not looking to go to Europe for a bargain these days,” said Allen Kay, a spokesman for the Travel Industry Association. “They are going to see London or Paris, and the exchange rate is secondary. But you can do a few things to make it somewhat less expensive.”
One tip widely used is to avoid companies that charge a fee to exchange the dollar into the local currency. These businesses, which are usually found at airports and other tourist zones, usually don’t have the most up-to-the-minute exchange rate. In addition, they’ll also charge a fee for the service.
Instead, most U.S. banks will offer the best exchange rates for customers that use their ATM or credit cards. However, Kay said to check with your bank to determine what kind of fees might be involved.
Another thing travelers can do to help make the dollar stretch further is to pay for things before the trip. For instance, see if you can pay your entire hotel bill or price for tours in advance. This will save travelers cash should the pound or euro gain more strength by the time you go on vacation.
And, if you’re among those that believe the dollar will continue to slip – you might even make it part of your investment strategy. Some big U.S. financial institutions allow clients to convert dollars into another currency to be held with the bank. There’s also foreign denominated certificate of deposits that are available.
Associated Press
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