International travel just became cheaper
The US dollar's exchange rates with international currencies have improved in the last eight months. This means food, transportation costs, and other expenses will cost you less when visiting some popular destinations across the globe.
The US dollar's exchange rates with international currencies have improved in the last eight months. This means food, transportation costs, and other expenses will cost you less when visiting some popular destinations across the globe.
Traveling to another country may be a dream you鈥檝e kept putting off because it鈥檚 expensive. Well, here鈥檚 some good news for you: it鈥檚 a little bit cheaper now, so consider packing your bags soon.
The American dollar鈥檚 exchange rates with international currencies have improved in the last eight months, especially against the euro, Australian dollar, Canadian dollar and Japanese yen.
鈥淏ased on the recent drop across several exchange rates, now is better than ever to travel abroad as an American,鈥� Christopher P. de Lorimier writes in an email. De Lorimier is an investment advisor representative for O鈥機onnor Wealth Management in Pasadena, California.
That means entry fees, transportation costs and other expenses will cost you less than they would have last year. Let鈥檚 take a closer look at some popular destinations.
Europe
The largest gap between the euro (鈧�) and U.S. dollar in the past 10 years was聽鈧�0.628聽to $1 in April 2008, but this year the two had a closer rate of 鈧�0.861 per $1 on January 21, an overall value increase for the dollar of 37.1%.
But even traveling now compared to last year is cheaper. From last May alone, the dollar increased its value 19.9%, based on Bloomberg聽data. For example, buying a ticket to the top of the Eiffel Tower, which is currently 鈧�15.5, will cost you $17.93 instead of $21.56. A four-day Eurail train pass between France and Italy at 鈧�300 will cost $347.10 instead of $417.30, last May鈥檚 price. That鈥檚 a savings of $70.
Australia
If you want to travel Down Under instead, the Australian dollar (AU$) rate is also in your favor. Since last July, the U.S. dollar has increased its value by 17.3% so that AU$1.235 equated to US$1, as of January 21, based on Bloomberg聽data. A walking tour of the Sydney Opera House, priced at AU$37, is now US$29.93 instead of US$35.11, as it was last summer. Plus, the bigger the expense, the more you can save with this current exchange rate.
Canada
Following a more extreme downward trajectory than the Australian dollar, the Canadian dollar (CA$) has fallen to a more than five-year low, so the rate was CA$1.234 to US$1 on January 21 based on Bloomberg聽data. This trend has been attributed to falling prices for its largest export, crude oil, and an employment rate that is far from robust.
However, iIf you鈥檙e close to the Canadian border in America, you can save even more on your transportation costs. The average price of gas in the U.S. right now is聽$2.32 per gallon, according to the U.S. Energy Information Administration. This is the lowest price since 2010, and is one of the cheapest rates internationally too.
Once you make it over to Canada, the price of gas is in decline there too. Traditionally, though, Canadian gas is more expensive than American petrol, so US$4 a gallon up north is actually a deal.
Japan
Outside of the Western world, Japan鈥檚 rate for the yen (楼) against the dollar is also more favorable this year. If you take a trip, a five-day tourist pass for the聽Shinkansen, or 鈥渂ullet train,鈥� between Tokyo and Kyoto, for example, costs 楼35,000. Last February this meant $346.50, but thanks to the recent rate change, it comes to $297.50 鈥� a savings of just under $50.
The rate last February was at a low of 聽楼100.98 to the dollar, but the dollar increased in value by 16.9%, so the rate this January 21 was 楼117.97 to the dollar, based on Bloombergdata.
Rates fluctuate
In sum, a $20 American bill now comes to 鈧�17.26 in Europe, AU$24.72 in Australia, CA$24.66 in Canada and 楼2,359.40 in Japan. Of the four, the rate against the euro has seen the most positive change in the past year. A trip to Europe, then, is the most cost-effective in terms of exchange rate changes alone, but remember that these aren鈥檛 fixed rates.
De Lorimier explains, 鈥淏eing aware of the overall changes to exchange rates (and the direction they are moving) can allow you to save a great deal of money while having the chance to travel.鈥� Granted, you鈥檒l also want to be careful about how you exchange your money because some ways carry heavier fees than others.
Two of the best approaches involve plastic. Bringing聽a no foreign transaction fee credit cardon your trip will save you an extra 3% on every dollar spent abroad, and a聽no-fee debit card聽will not charge you international ATM fees or foreign transaction fees.
As this is the time of year to make resolutions, make the leap and plan for your dream vacation abroad while the rates stay in your favor.
The post聽Currency Shifts Give You More Bang for Your Buck Abroad聽appeared first on聽NerdWallet News.