Strong Dollar vs Euro, Yen: Good News for U.S. Travelers

Strong Dollar vs. Euro, Yen: Good News for U.S. Travelers


The U.S. Dollar is Strong vs. the Euro and Japanese Yen, good news for U.S. travelers planning travel to Europe this summer and future travel to Japan (for late 2022-2023 travel; see Why Japan Hasn’t Reopened to International Visitors)

U.S. Dollar Close to Parity with the Euro

At time of writing, 1 Euro is worth $1.05, close to parity. This is a 5 year high for the dollar-euro exchange rate, and should it go to $1.02, that exchange rate was last seen in 2002. The dollar's strength is due to due to the current geopolitical concerns, including Russia's invasion of Ukraine, the EU's recently proposed ban on oil from Russia, currently Europe's main energy supplier, the Fed's anticipated series of interest rate increases, and the dollar's status as a reserve currency.

Beyond making it easier to know what you're paying with minimal mental arithmetic, the more advantageous exchange rate helps counteract the inflationary increases we're seeing with so much of travel, from airfares to hotel rates.

Strong U.S. Dollar vs. Euro


US Dollar's High vs. the Japanese Yen

The U.S. dollar is also at a high against the Japanese Yen. At the end of 2020, the exchange rate was 103 yen to the dollar; at time of writing, it's 130 yen to the dollar, more than a 25% depreciation of the yen. As with the euro, the yen has weakened as investors chase higher yield with the dollar, and also as investors express a more pessimistic view on Japan's economy and labor market. Japan relies heavily on natural resource and energy imports, and is faced with the impact of inflation in commodity markets and the jolt to energy prices of the Russian invasion, yet with many businesses unable to pass along all price hikes to their customers.

This obviously isn't good for Japanese consumers, but it is a boon to U.S. visitors, including the clients we're planning Japan travel for.

Strong U.S. Dollar vs. Japanese Yen

While most travelers don't make their travel plans based on exchange rates, the U.S. dollar's strength vis-a-vis the euro and Japanese yen can help make visits to Europe and Japan more affordable than they'd otherwise be, compared to exchange rates a few years ago.

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