You needn’t be a scholar to know that the value of foreign currencies goes up and down depending on the health of a nation’s economy.
If things are going badly, the currency drops; if times are booming, the currency soars. But how can you predict the direction of a particular money note—especially a foreign one?
Those questions are currently asked by people in the travel industry as they chart the direction of the British pound.
Persons operating tours of Great Britain are quietly wondering if the pound will drop, thus reducing the cost of travel there. And individual Americans interested in a British vacation are asking the same question—as should anyone thinking of travel to Europe.
Prior to the recent results of the British election, the pound had plummeted downward to a value of about US $1.20. When results of the British election came in, showing a resounding victory for that nation’s Conservative Party, the pound soared to a value of about $1.33 per pound.
Surprised observers explained the rise as a normal reaction to a business-oriented party. But in light of Brexit, they were quite clearly puzzled by the increase.
Further changes in the value will be affected by the skill with which Prime Minister Boris Johnson does or does not bring about Britain’s departure from the European Union.
If he and his party avoid chaos, the pound may rise still further. If they don’t, it may drop.
How will other members of Great Britain react to its emergence from the European Union? A key participant will be Scotland, which currently threatens to secede from the country if it departs from the European Union.
And what about Ireland? Will British banks and other businesses depart from England and move to Ireland so they can remain in the E.U.? Such a step would badly affect the value of the pound.
As far as other British businesses are concerned, similar factors may directly affect the value of the British pound—and henceforth, the cost of a vacation trip in Great Britain.
About the only other major currency facing such drastic changes is the Argentinian peso, currently selling at an historic low (which is one reason we named its biggest city one of the Best Places to Go in 2020). A great many cost-conscious tourists are currently traveling there to take advantage of the low costs enabled by that currency.
But Great Britain may—or may not—soon join it.
But Great Britain may—or may not—soon join it.
It all means that the cost-conscious tourist must now turn to the financial pages in the newspaper on a frequent basis. In the charts of those pages are published constantly changing currency rates that have a direct effect on vacation pleasures.
