If you need an excuse to travel overseas, here it is: the strong U.S. dollar.
Today, for example, you would have received 0.88 Euros for one U.S. dollar. (See Google image below.) That tied the exchange rate in Nov. 13 and Aug. 15. Before those dates, the last time the dollar was that high against the Euro was 0.94 on April 7, 2017.
A strong U.S. dollar means someone can exchange it for more of a foreign currency. (It also means U.S. consumers can buy foreign goods sold here for less, but foreign consumers will pay more for U.S. goods imported to other countries.)
Why is the dollar up? Well, there are several reasons:
1. The U.S. economy is sustaining strong growth when many other countries’ (China and Germany, for example) economic growth is slowing. The U.S. gross domestic product, which is a measure of economic growth, was 3.5 percent in the third quarter and 4.2 percent in the second quarter.
2. The currencies of some countries have been hurt by fears that U.S. tariffs will curb economic growth.
3. Some countries’ currencies have fallen for other reasons, such as economic crisis (Venezuela) and high inflation (Turkey) and high foreign-currency debt levels (Indonesia).
This summer, some Wall Street forecasters expected the dollar to fall from its lofty perch. Morgan Stanley, State Street Corp. and Wells Fargo & Co. said the dollar’s fast rise (up about 5 percent from mid-April to late July) was nearly over, according to Bloomberg article.
The dollar’s fall hasn’t happened yet. It’s anyone’s guess when it will, but it will. Currencies rise and fall like the stock market.
So, take advantage of the strong dollar combined with the proliferation of low-fare European airlines and plan trip soon.