How does the unpredictable U.S. dollar impact vacation planning for travelers?
So, with the dollar's dip, how can you maximize your travel budget?
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The strength of the U.S. dollar shows volatility, having dropped for a third consecutive day against various international currencies on May 21. Anticipated American tariffs are expected to further impact U.S. currency values. According to CEPR, a European nonprofit conducting policy-relevant economic research, standard economic theory suggests that import tariffs should generally cause the currency of the tariff-imposing country to strengthen.
"If global trade transactions are largely processed using a dominant currency like the U.S. dollar," wrote Jonathan Hartley and Alessandro Rebucci in their paper, *
Despite this theory, President Donald Trump's tariff policies significantly contribute to the current decline and fluctuation of the U.S. Dollar Index, which fell to 97.9 in late April, reaching its lowest point in just over 3 years. (As of this publication, the dollar index sits at 99.49 following the 3-day drop.) Concurrently, the Euro and the Japanese Yen gained strength against the dollar, as reported by Reuters. So, what implications does this precisely have for travelers planning their summer getaways?
The 2025 Bankrate Summer Travel Survey indicated that fewer than half of Americans actually have summer travel plans, with 65% of respondents attributing this primarily to affordability concerns. Among those surveyed, only 46% intend to travel at all; 38% plan domestic trips, and 15% aim for international destinations, with some overlap.
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Moreover, the survey revealed that a quarter of U.S. adults don't plan any summer vacation. "It's becoming even more costly," noted Uri Kogan, a frequent traveler residing in the San Francisco Bay Area. "We just visited London last week, so this was definitely on my mind."
If you are considering travel, Bankrate senior industry analyst Ted Rossman advised booking sooner rather than later. Rossman also suggested in the survey, "It's beneficial to choose less popular times. For example, consider visiting a destination during its shoulder or off-season. Take an early, late, or connecting flight. Alternatively, fly midweek."
In addition, when making summer travel plans, you should account for the U.S. dollar's volatility before incurring debt for a beach vacation. While the future remains uncertain, many experts lean toward further currency weakening. Therefore, it's important, as Rossman recommends, to secure payments early.
However, Rossman encouraged travelers not to let these factors discourage them from taking personal time. "Don't let your vacation days go unused," he stated in the survey. "At the very least, take some time off to relax and recharge at home."
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