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Travel Services

Where are the major currencies headed?

Looking ahead to where the major currencies (US Dollar, the Euro, Japanese Yen, British Pound, Swiss Franc) are headed can help those travelers on a budget plan for the most cost effective vacation. By choosing a location where the dollar has the greatest value, you can save on every aspect of your trip: hotels, airfare, restaurants, and souvenirs. For the budget conscience, looking at exchange rates and the projected trends of the major currencies could end up saving you a fair amount on your vacation.

US Dollar

The US Dollar is projected to gain strength throughout the coming year, due to the Fed increasing the interest rate. The US economy is growing, and the strength of the economy will be projected in the value of the US Dollar. For American travelers, this means that your dollar will go farther in the coming months than it has in the past six months, especially in European countries.

Japanese Yen

The Yen is projected to continue to strengthen and out pace the dollar. Travelers on a strict budget should stay away from plans to travel to Japan, as the trip might end up being more expensive than projected. The strength of the Yen is due to Japan's growing economy and very low interest rate. Of the major currencies, the Yen sees to be the only one with the staying power to out value the US Dollar.

Swiss Franc

Though the Swiss Franc is generally a very strong and stable currency, the 25 bp increase in the LIBOR rate by the Swiss National Bank on June 17 th , 2004, will cause the value to continue to strengthen. For travelers, this means that an already expensive trip to Switzerland will be even more pricey. If the strength of the Swiss Franc continues, travelers may want to look for somewhere other than the Swiss Alps to ski this winter. The British Pound will also continue to gain strength, most notably, the Pound will gain value against the Euro. Even though the Pound will be strengthening the value should not out pace the US Dollar.

American travelers can use the strength of the dollar to their advantage. During the past year and a half while the Euro gained strength against the dollar, American travelers were hard pressed to find a European vacation deal. Now that the dollar is strengthening, trips to Europe will be much more affordable than they were a year ago. Although the US Dollar is strengthening against the Euro, it is just starting to pull even in value due to the loss of value it had sustained for the past year and a half. Given some time, the Dollar may eventually pull ahead in value, once again making Europe an affordable vacation destination.