Americans who have been dreaming about a vacation in Europe have a perfect combination of price and opportunity this summer — one based on a slumping euro vs. the U.S. dollar, and the other based on the end of most COVID-19 restrictions.
The euro dropped below $1.02 late last week, extending a slump to new 20-year lows and bringing the currency closer to parity with the dollar, CNBC reported. The euro has declined amid fears of a recession in many EU countries, as well as uncertainty over the continent’s oil and gas supply ever since Russia invaded Ukraine.
Many analysts expect the euro to keep edging lower because of all the economic headwinds.
“I’m bearish on the euro until I see a headline that tells me global growth is going to pick up in a big way,” Nomura strategist Jordan Rochester told CNN.
He expects the euro to attain parity with the dollar by the end of August.
‘Live Richer’ Podcast: Trading Secrets — From Crypto to Congress — With WallStreetBets
The greenback is gaining ground against the euro at the same time that Americans can travel freely to Europe for the first time since 2019, pre-pandemic. In June 2019, the average conversion rate was about 1.13 dollars to one euro, Bloomberg reported. With the two currencies now almost equal, the dollar will buy you more in Europe now than it did then, which makes travel especially tempting.
Even after accounting for inflation — which is hitting some European countries as hard as it’s hitting the U.S. — traveling around Europe this year is still cheaper for Americans than it was three years ago.
If you’re thinking about hopping across the pond this year, make sure you research where the euro is accepted and where it is not. Certain European countries use their own currency — and the dollar isn’t nearly as strong in some of those places. For example, in the UK, the British pound equals about 1.20 U.S. dollars, which means that pint and shepherd’s pie you order down at the local pub might be a little pricey.
More From GOBankingRates