US Dollar in 2008: a comeback for the greenback?

by Anna Brones on

A low dollar is incredibly depressing for someone who, much like myself, enjoys traveling to Europe. In order to not fall into the black hole of a personal economic depression last summer when I was living in France, I actually stopped doing mental conversions and just accepted the prices in euros as they were. Example: “That shirt costs 25 euros? Great, that’s close enough to $25” (FYI: it’s not). The situation would have been even worse if the shirt’s price tag was in British pounds. Needless to say, by the end of the summer when I checked my bank account, I got a nice little shock.

Don’t think that all Europeans have been jumping for joy with the low exchange rate. Despite the fact that weekend trips to the good ole US of A now have a nice price tag, tourism is a two way street and Americans visiting the old continent have taken a decrease. The BBC reported today that in December 2007 tourism in London had fallen by 4.1%, which was accredited to the low dollar rate.

Some economists however are currently speculating that the dollar might make a year end comeback towards the latter part of 2008. Jeremy Stretch, the senior currency strategist at Rabobank, gave Americans and the global economy some sense of reassurance when he stated that the dollar could go as low as $1.50 to the euro, but that come the autumn months it could bounce back to $1.35. Add to that a high UK trade deficit and a weakening housing market and those tourists might soon come flocking back to London. As for Americans touring the rest of Europe, we will just have to wait and see.

I want to be excited at the prospect of the dollar regaining some strength, but even at $1.35, that 25 euro shirt is still…. well, I am not going to go there.

Europeans invade New York for holiday shopping

by Iva Skoch on

It’s been a while since anyone has called New York the “bargain place”. This year, New York might as well use it as a city motto. With strong currency working to their advantage, Europeans have been coming to New York in droves to do all their holidays shopping.

Today’s NY Times had an comparison table of London and New York prices. Here is an example:

  • New York prices – 8 Gigabytes iPod Touch: $299, Levis 501 jeans: $58, Starbucks Grande Latte: $3.75
  • London prices – 8 Gigabytes iPod Touch: $398, Levis 501 jeans: $120, Starbucks Grande Latte: $4.80

How many iPods do you have to buy to make the trip worth it though? Air tickets are really expensive before the holidays and New York hotels–trying to capitalize on the strong Euro/Pound are charging more than $400/night for a hotel that used to cost about $100 just a few years ago…

I have heard from Londoners that having a fun weekend in London will cost you more than flying someplace for the weekend. London is so expensive now that the only way to save money is to leave it. Quite a concept!

Horror of Horrors: US Dollar Now as Worthless as Canadian Dollar!

by Neil Woodburn on

Well, I guess Americans such as myself can no longer make fun of our neighbors to the north.

It wasn’t so long ago that the almighty American dollar was so strong in Canada that I could wander across the border and with the loose change in my pocket buy a couple of Canadian manservants to clean my house and wash my laundry.

This is not the case anymore. The US dollar, after hitting an all-time low against the euro earlier this week, has continued its dismal slide to the point where one US dollar is now equal to one Canadian dollar.

Yes, folks, it’s a 1-to-1 exchange rate with the Canucks!

Can it get any worse?!?!? Not only has Canada become an expensive travel destination for us poor American mopes, but now our entire nation is going to be “on sale” as legions of Canadians pour across the border in search of shiny trinkets and cheap baseball hats.

Savvy Traveler: Eurozone vs. European Union

by Iva Skoch on

People who come to Eastern Europe (or East Central Europe–as those who like to remove themselves from any association with Russia–call Poland, Hungary and the Czech Republic now) often wonder why even if they are in the EU, they can’t use euros here. Nothing is ever easy with the EU, is it.

There are 27 member states in the EU, yet only 13 of them have entered stage 3 of their EU membership: adoption of the Euro currency.

Here are the EU countries NOT using the Euro:

  • United Kingdom
  • Denmark
  • Sweden
  • Czech Republic
  • Bulgaria
  • Romania
  • Hungary
  • Poland
  • Cyprus
  • Estonia
  • Latvia
  • Lithuania
  • Malta
  • Slovakia

However, only Denmark and the UK negotiated a Euro exclusion from the original Maastricht Treaty.

The rest of the countries must legally join the Eurozone sooner or later, whether it is an economic advantage to them or not. The Czech Republic, for example is trying to postpone the Euro adoption as long as possible (fears of inflation) while Slovakia wants to be on the Euro as quickly as possible (hopes for new business opportunities). What everyone agrees on is that adopting the Euro makes everything more expensive for the consumer…and for the tourist.

Dollar Crumples But Tourists Still Come to Europe

by Iva Skoch on

The latest plunge of the dollar (more than 2 dollars to the British pound now and 1.35 to the Euro) caused many Americans in Europe to scale back their vacations, July 19 NY Times article reports. Apparently, these things are all relative. It has not significantly influenced the number of Americans traveling to Europe. Just as people are getting used to the nearly $4 gallons of gas, they are getting used to $5 cans of soda and $300 mediocre hotel rooms in Europe.

What it has changed, however, is the number of Europeans–with strong currency to their advantage–traveling to the US. It was cheap for Europeans to buy clothes and electronics in the US before (because of the low sales tax) but now with the exchange rate, it is super-cheap. Last time I was flying from London to NYC, they actually handed out magazines advertising all the real estate bargains in the world. One of the bargains was Manhattan, NY. I had to laugh.