It had been a wobbly few months for the dollar, which had been slowly dropping in value against the euro and other currencies since January. Then on Wednesday, the Federal Reserve hinted that it would raise interest rates and, just like that, the dollar is on a rebound.
What does the Federal Reserve have to do with your overseas vacation? If it raises interest rates, investors, including those from overseas with lots of currency to play with, buy dollars. That increases demand for dollars, thereby raising the value of your own personal stash of cash. In terms of your vacation, that means you can nab a fancy hotel in Paris — or anywhere, really — for less.
On May 2, a night at the Paris Ritz for, say, 1,000 euros (if you can secure that favorable nightly rate) would cost $1,153. On May 18, that price dropped to $1,122.
The difference is trifling, I know. But the hope for those of us who dream of affordable European getaways is that the dollar will stay strong — and get stronger. And at least we won’t need to hold our breath and keep our eye on the currency exchange after we book airline tickets. (And, yes, for an affordable getaway, we’ll skip the Ritz.)
The fact that some travelers are giving Europe a pass, reluctant to visit a region in turmoil, is also keeping prices low for those who go.
There may be lingering discomfort about the refugee crisis. More potent, though, is the concern about terrorist attacks after the mass shooting in Paris in November and bomb explosions in Brussels in March. The U.S. State Department has issued a travel alert noting that terrorist groups “continue to plan near-term attacks throughout Europe, targeting sporting events, tourist sites, restaurants, and transportation.” It expires on June 20.
As for the strength of the dollar against other currencies, I hope that has no expiration date.
Send your questions or tips to Travel Editor Kerri Westenberg at firstname.lastname@example.org, and follow her on Twitter: @kerriwestenberg.