There’s never been a better time to be a tourist—as long as you’re paying in dollars. Major currencies worldwide have plunged in value, meaning each US dollar buys more euros and renminbi today than it did one year ago.
For American tourists, this is good news: for instance, no museum listed here changed the sticker price of admission, but visitors can take advantage of a built-in rebate. With major economies outside the US struggling for economic growth, the ‘red carpet’ of deep discounts for tourists has been rolled out. What explains the rise in purchasing power of the dollar? One aspect is the recovering US economy, with unemployment falling to 5.5% as of last Friday’s jobs report. Another is the behavior of central banks around the world, including the European Central Bank, that are engaging in monetary easing—which effectively introduces more money into the economy to jumpstart growth. In still other parts of the world, weakness in commodity prices, especially oil, has hurt economies like Russia’s that are highly dependent on the sale of natural resources.
How long will a strong dollar last? If you’ve been putting off a trip abroad, now might be the time to start packing your bags.