June 1, 2004 -- Can anything stop the fall of the once-proud U.S. dollar?
The dollar's collapse against most other currencies has slowed to a gradual slide rather than the all-out plummet we saw in 2003, but our pale greenbacks still aren't looking that healthy across much of the world.
The Canadian dollar is up to 73¢, the Euro hovers at a grim $1.22, and the British pound has risen to an amazing $1.83. Even the Australian dollar checks in at a respectable 71¢. That's down from the horrifying 79¢ it reached in February, but way up from the 59¢-60¢ level it maintained in early 2003.
The weak dollar is great for European visiting the US, but it's lousy for US travelers. It means that even without hotels or attractions raising their prices, your average European hotel room will cost 10% more than it did last year, when the Euro was at around $1.13.
In a world where even the Hungarian forint is busy spanking the dollar, it took a lot of hunting to find places where US cash still holds its value. But we tracked some down:
- Not only is Mexico close by, the dollar is doing well against the peso. Many Mexican resorts price their lodgings in dollars, too.
- The currencies of most of the Caribbean are locked to the dollar.
- Further south, the Costa Rican currency is locked to the dollar. Ecuador actually uses U.S. dollars as their legal tender. The dollar is also the informal currency of Honduras and Nicaragua, where the local cash has been getting weaker and weaker.
- Argentina is still an inexpensive destination even though their peso has gotten stronger recently.
- Several Asian countries lock their currencies to the dollar. Budget travelers should consider China and Malaysia. The Philippine peso and Vietnamese dong aren't locked to the dollar, but our bucks have been doing pretty well in those countries. Hong Kong and Singapore dollars are pegged to ours, but those destinations are expensive no matter what.
- The dollar is doing okay in Poland and Romania. Although dollars are weak in the Czech Republic and Hungary, you still might be able to put together cheap trips outside major cities, where prices are low no matter what.
Even if you dream of that European vacation, there are still ways to make your dollar go farther. Check out packages that include airfare and hotels; they're often "hedged" against the dollar and could provide good value. And reduce your expectations a bit. Try B&Bs and guesthouses instead of hotels. Fly on budget airlines within Europe, or look for advance-purchase discounts on train fares. You've got to be a smarter traveler when the dollar is weak -- but that doesn't mean you can't travel at all.