Will your holiday be cheaper?

By | Category: Travel rumblings

Purse with pocket money isolated on white backgroundAt the end of last week Post Office Money released a survey saying that for many countries, your holiday would be cheaper this year.

Not necessarily so.

It might have been true when Post Office Money conducted their research and it might be true at the time you eventually go providing that isn’t in the next day or so.

As it stands, this very day, the pound is at a five and a half year low against the US dollar and an eight week losing streak against the euro. Given that the dollar is used widely on cruise ships, in the Caribbean as well as in the US, when you come to buy everyday like things like restaurant bills, taxi and bus rides, you will be paying more. You have to go back to early 2010 to find a time when the pound was this weak and then it was for only a short space of time before it started to rise. It might rise this time – who knows – but if you are budgeting for a holiday in the US this year plan on spending more than you might have thought and take forecasts like those from Post Office Money with a pinch of salt.

The same applies to the euro. On Friday, the pound dropped to its lowest level against the euro for over a year. If you were comparing rates today with those back in the summer of 2014, you would be ahead and day-to-day items would be cheaper. Compare it will summer 2015 and you’ll be worse off. In fairness, the pound was at a lower rate against the euro from March 2008 until very early January 2015 so we are still better off than most years other than the last one.

There have been declines against the Swiss franc and the Danish kroner since last year as well so where should you consider holidaying? At the moment Turkey, Argentina, Brazil and Mexico look like good bets

AS they say in those financial ads, prices can go up and down so be wary of what you read. Ask yourself, how long ago was the comparison done? If a week is a long time in politics it can be an eternity in the foreign exchange markets.

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