If you’ve got a trip to Europe on your “bucket list,” you might want to go for it now. For Americans, travel in France, Germany, Italy, and the other members of the Eurozone will be as cheap as it has been in years — for the next few months, at least.
The value of the Euro — the collective currency of the Eurozone — has been in free fall against the American dollar over the past few months. On Friday, the Euro fell to $1.12, which is its lowest level in 11 years. That’s a very sharp decline from earlier in the year, when the Euro was trading at around $1.40.
European economies are weak, and the European Central Bank has announced that it will be engaged in a “quantitative easing” program that will seek to expand the money supply — and, inevitably, have an inflationary impact — in an effort to spur economic growth. And because the ECB has just announced its program, and it will take some time for all of the details to be absorbed by the financial markets, we can expect the value of the Euro to continue to fall against the dollar in the near future.
All of this is good news for Americans who are interested in visiting Europe. Because the Federal Reserve Board has already completed the quantitative easing program in the U.S. and has announced that it will be raising interest rates in the near future, the dollar should remain very strong against the Euro. That means American tourist dollars will get better exchange rates at currency stores and will have more buying power on the streets of Paris and Rome — which will bring down the real cost of lodging, meals and museum fees.
Couple that with the ever-present European interest in encouraging tourism, and it’s not hard to forecast that bargain-hunting U.S. travelers will have a field day in 2015.