The worth of different currencies rises and falls on a daily basis, but what does that mean for international travelers? Currency exchange affects what you can afford when you decide to travel. It can mean that the currency you’re purchasing for travel could be worth less or more than the currency you’re paying in. It can also affect your accommodation bookings, anything that you wish to buy whilst visiting that country, and the economy of the country you’re visiting. So how could it affect you? Want to know how forex could impact the getaway on that luxury cruise or your next business trip to London? Well keep on reading as we’ll be discussing how forex affects the cost of travel
Holidays Booked in Advance
Large swings in any currency can affect the worth of the dollar. Americans who book vacations months in advance, will sometimes find these currency fluctuations have a major impact on the total costs of accommodation or activity bookings. For example, if you had booked a getaway to London before Brexit, you could now be paying less than you expected. Due to the plummeting worth of the pound, which is now at its lowest for 163 years, the dollar is worth more; therefore, you are able to get more for your buck.
What is the Exchange Like?
At the moment of writing this article (November, 2016) the dollar sits quite healthily, compared to currencies such as the pound and the euro. The exchange rate between the US dollar and the euro is currently at 1 dollar to 0.95 cents (euro), and the pound is currently at 1 dollar to 0.80 pence. However, the Australian dollar is worth more than the US dollar, currently sitting at 1 US dollar to 1.35 Australian dollars. These exchange rates can influence many people, as it can affect where they choose to go on vacation. A lot of Americans will choose to visit Europe or the UK, as the foreign currency is worth less at the moment therefore, when you are visiting that country you will be able to purchase more.
Impact on Travelers
As noted earlier, forex will have influence on where travelers decide to visit. Everyone enjoys getting the best for their money, so many Americans will watch the exchange rate to decide where to go on vacation. However, the exchange rate does not just affect how much you can get for your money, it will also affect the foreign country’s economy. For example, if this country’s main source of income is from tourism and the exchange rate rises in favor of their currency rather than the dollar, tourists will opt for somewhere cheaper. This means that the country will lose its source of income which can create poverty and political unrest, which in turn will make tourists even less likely to visit.
When travelling abroad it can bring up uncertainty for your budget. The value of foreign currencies are able to unexpectedly fluctuate, making it difficult to set out a budget plan. With these ever changing rates, it can force vacation goers to adjust their travel patterns and plans.
Exchange rates are impossible to predict, and they can change quite dramatically at the drop of a hat. However, you can take steps to ensure you take advantage of good currency movements.