Hundreds of millions of dollars are spent by Americans every year on foreign currencies. The largest market in the world is the foreign exchange. Every day, the foreign exchange deals with four trillion dollars in transactions, mainly through businesses, insurance companies, mutual funds, pension funds, hedge funds and banks.
Because the American dollar has gotten stronger this year, foreign travel has become more attractive. The travel dollar stretches a lot further for American tourists abroad nowadays. The current trend these days of foreign governments weakening their currencies in order to boost exports has actually been a boon for the U.S. dollar.
The British Pound
Unlike the Euro, the British pound has seen a mere 3% decline over the past year. The British economy is relatively strong and their interest rates are stable. London continues to be the primary destination for American tourists, although Scotland, Wales and Northern Ireland were also popular choices for the 2.5 million who visited the UK in 2015. Cultural ties between the States and Britain remain strong and historical significance is a big draw, along with the romantic Scottish castles.
The Mexican Peso
Mexico is still a popular choice for American tourists, with 21 million trips made there this year. Beach resorts and Mayan ruins are a big draw, even though traffic to Acapulco and Sinaloa has been on the decline due to reports of gang violence. The peso, presently standing at 17.3 to the U.S. dollar, is the eighth most traded currency worldwide. Mexico’s second-largest source of foreign currency (oil is first) is from Mexicans living in the U.S. sending money back home to their families.
The Euro
European history, culture and art have always attracted Americans to Europe. Four favourite destinations for American tourists are: Spain, Italy, France and Germany. Although, previously high prices may have put a damper on tourism, the 16% dip in the Euro allows a better appreciation of the dollar spent in Europe. Continuous problems in the southern countries of Europe has, in effect, offset the strength of the German economy.
The Japanese Yen
Although the Japanese yen declined 43% over the past five years, this year it dipped by only 3%. In spite of fears over the effects of the Fukushima radiation leak of 2011, Japan’s history, culture and food are big attractions to American tourists. Japan is also a country of great natural beauty and is considered to be one of the safest in the world. The decline of the yen in recent years has encouraged a greater flow of American tourism. Even though Japan remains vulnerable to natural disasters, the advancement of their technology, their friendliness and hospitality are very inviting.
The Loonie
Mainly due to a drop in oil prices, the Canadian dollar declined by 15% this past year. That means, Americans traveling to Canada will receive 1.3 Canadian dollars to their U.S. dollar. Drawn also by Canada’s natural beauty, safety and friendliness, Americans made 12.5 million trips to Canada last year.
