European Travel Becoming More Expensive
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Street scene in Lisbon, Portugal (Photo via Starcevic / iStock Unreleased) (Starcevic/iStock Unreleased)
International travel is in high demand ahead of the peak summer travel season but U.S. travelers with their sights set on Europe can expect to pay a little more for their trip compared to this time last year.
The euro, which is the official currency of 20 of the 27 European Union member nations, came equal to the U.S. dollar last July, with summer travelers eager to get away post-pandemic taking advantage of a 1:1 exchange rate with the euro for the first time in two decades.
By the start of last fall, U.S. travelers could buy one euro for as little as 96 cents. However, according to CNBC, the dollar has lost about 14 percent of its value against the euro since then and Americans needed at least $1.10 to buy one euro as recently as April 4.
“Currencies are like a marathon that never ends,” said Jonas Goltermann, deputy chief markets economist and head of foreign-exchange markets at Capital Economics, told CNBC.
“Last year, the U.S. was just going faster and leaving everyone in the dust. Now, to some extent, that’s changed.”
“Europe for much of last year was a screaming, bargain-basement deal for Americans,” Mark Zandi, chief economist at Moody’s Analytics, told the news outlet. “Foreign travel for Americans is still a bargain. It’s just not a once-in-a-lifetime one.”
Experts attribute the change in dollar value compared to other currencies to interest rates, pointing out that the U.S. Federal Reserve is approaching the end of its rate-hiking cycle, making the U.S. less attractive to investors and ultimately weakening the dollar.
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