Perhaps the biggest travel news of the current season is that the U.S. currency remains unusually strong against virtually every other currency. When you travel abroad in the coming months, you will enjoy lower costs at your destination for everything you buy, thanks to a mighty dollar. While the dollar's strength may have adverse consequences for American companies that manufacture goods for export, its impact on the traveler is uniformly good.
What are the destinations where the U.S. dollar creates advantages for American travelers? Canada comes first. For reasons that few are able to explain, the Canadian "loonie" (shorthand for its dollar) has plummeted in value against our U.S.currency. When you nowadays are in Toronto or Montréal or Vancouver or wherever in our neighbor to the north, and you exchange your U.S. dollars for Canadian bills, you now receive $1.32 Canadian dollars for every U.S. dollar you exchange. You receive, in effect, a 32% advantage in every such transaction, and that Canadian meal that costs, say, 10 Canadian dollars, is actually costing you only 7 or so American dollars.
Why is this happening? I've read a dozen explanations by noted economists, and none of them makes any sense. Let us simply rejoice in this mysterious phenomenon, and give serious thought to choosing a Canadian destination for our next vacation trip.
A runner-up to Canada in terms of its currently-favorable exchange rate for Americans is the British pound, which has declined in value not as much as 30 percent (as is the case with Canada) but by as much as 20 percent. Just three years ago, a pound cost $1.60 and virtually everything in Great Britain was costly to Americans. Today, following Britain's disastrous vote to depart from the European Union, a pound costs as little as $1.30 (it has occasionally dropped to as little as $1.20 before rebounding), and products in Britain are 20 percent cheaper than before to American visitors.
The Mexican peso has undergone a similar devaluation. Three years ago, the U.S. dollar bought only 13 Mexican pesos. Today it buys nearly 20 Mexican pesos, and life in those delightful Mexican seaside resorts is considerably cheaper for the American visitor.
And so it goes. The euro costs only $1.12; and one U.S. dollar buys an amazing 66 Russian rubles. In the latter case, U.S. tourists are therefore flocking to Moscow and St. Petersburg after avoiding those two cities in previous years.
There are, of course, reasons for not traveling to various destinations: the outbreak of the Zika virus, the fear of terrorism. But the strength of the U.S. dollar is a powerful antidote to those threats, and from the standpoint of sheer purchasing power, the U.S. dollar is today stronger than in many years.
To many of the world's destinations, it's a good time to travel.
