The Dollar is Climbing Back–Good News for Travelers

As an American traveler, one topic that I care deeply about is the value of the dollar. Over the past year, changing my crisp 100 dollar bills into euros or kronors or pesos has been a bummer of an experience. And it’s rare to speak with a traveler returning from England or Europe who doesn’t comment on how expensive everything was over there.

The worst was in May when I was in France and bought euros for $1.74 each. That was more than depressing, and with the added commission, my hundreds turned into a handful of euros, quickly used up with a few souvenirs and glasses of vino.

But Friday’s Wall St. Journal had good news for travelers like me, with a headline that claimed “The Dollar’s Best Gain in Six Years Powers Stocks.” Yeah baby!

Apparently it takes bad news for Europe’s economy to pump up our dollar. It’s the bad news there that has brought the US dollar to a rate of just $1.50 against the euro. While we have writhed in pain over the subprime mortgage and the oil price crisis, Europe’s woes are just beginning.

“Historically, the dollar’s bull and bear markets tend to run in cycles of five to seven years. With the current period of dollar weakness approaching the top end of this historic range, some say that the dollar isn’t just stabilizing. It could be in the early stages of an extended rally.”

But the article also warned that analysts have forecasted the end of the bummer exchange rate, only to be hit with another plunge. Still, this $1.50 range is considered a ‘critical resistance point’ so after this it might be more downhill for the euro.

I hope this good news sticks around until Sept 14 when I’ll have to buy more euros in the Alps.