CaribbeanChoice.com
   HOME |  Carnival |  Recipes |  Gourmet Shop |  Islands |  Games |  Market |  News |  Links |  Events |  Articles |  Forums  |  Search 
 Worldwide
 Travel Menu


 Food 


 Caribbean Corner 

Feedback   
Tell us what you think!
Tell us what you want!



 
   Thursday, October 17, 2019 

Vote for your Country in the Battle of the Islands! Exchange Rates and Planning Your Next Trip

Currency exchange rates can effect the cost of your travel.

By Gerron Woodruffe

 Travel Guide     

Currency movements can affect the cost of a trip. For example, a favorable rate of exchange means that your local currency is worth more and will provide you with more buying power. In fact, travelers whose local currency has appreciated dramatically will find that they will be able to afford much more on their vacation this year. On the other hand, a less favorable exchange rate of exchange means that your currency will be worth less resulting in less buying power overseas. If your domestic currency has depreciated significantly you may find your options more limited. As a traveler, your main concern should be to get the most favorable rate possible. In order to do this, however, one must first understand the foreign exchange market.

In the foreign exchange market, the currency of one country is exchanged for an equivalent amount of the currency of another. Foreign exchange rates are not static, but change dynamically-sometimes many times within a single minute. At this point, however, most of you might be asking, why does it take more dollars to buy a euro this week than it did last week? Why would it cost you more today to buy a cup of coffee in another country than it did before, even though the price has remained the same there? The answer has to do with the value of a country's currency relative to the price of another currency.

Currencies, just like any other commodity that can be bought or sold, are subject to the laws of supply and demand. When more people want a particular currency, the cost of the currency in terms of other currencies will go up. When demand decreases or people do not want to hold a country's currency, the value will go down. One factor that directly affects demand for a currency is international trade. For instance, if I buy a Japanese car in the US, I give dollars to my dealer, who gave dollars to his distributor, and so on. But before the profits are banked by the carmaker in Japan, they are converted into Yen. There is a surge of buying of Japanese cars this month, the result is going to be increased demand for Yen-which will in turn cause an appreciation in the Yen's value. An increase in international investment into Japan would have the same effect, since more money is being converted into Yen to purchase Japanese assets.

As a traveler, understanding currency fluctuations will help you to take advantage of favorable rates of exchange and spot a deal when you see one. For example let's look at the EUR/USD (Euro vs. US dollar) currency pair did over the last three years and how any changes might have affected tourism in each of them.

Currency pair Year Rate of exchange (highest) Rate of exchange (Lowest)
EUR/USD 2003 $1.2646 $1.0333
2004 $1.3666 $1.1758
2005 $1.3579 $1.1864

From looking at the table taken from dailyfx.com, we can see that in less than 3 years, the euro steadily rose in value against the US dollar going from $1.2646 to a high of $1.3579. This favorable rate of exchange for Euros vs. US dollars made traveling to the United States a much better deal in 2005 than in both 2003 and 2004. For the traveler who noticed this long term upward trend early could have probably delayed his 2004 trip to the United States knowing that his hard earned cash would go further in 2005.

When planning a trip to another country all individuals should keep in mind that the major currencies tend to move +/- 1% in a given day, which is a relatively minor move unless you are changing thousands at a time. This means that visiting smaller countries with less developed economies should warrant more research and planning since, these countries' currency would prove more volatile to rate changes. A great way to find out about the current state of exchange rates is to visit GoCurrency.com, a currency conversion site that covers over 150 currencies worldwide.

To sum up, whether it's a business trip or a second honeymoon, a working knowledge of the foreign exchange market can and will make any international journey a more relaxed one.

    Share |

    CaribbeanChoice Travel
    Currency Converter

    More Articles by Gerron Woodruffe
    More Travel Articles

    Views expressed in the article are those of the author and are not necessarily the opinions of CaribbeanChoice, its staff or members.


     Sponsored Links     

     More Destinations     

    New Articles | New Recipes | Active Topics | New Links | Announcements & What's New

    Google
     

    CaribbeanChoice.com - Your Gateway to the Caribbean
    One Love. One People. All Caribbean!™

    Proverb: The tongue that buy you does sell you.
    Meaning: The same person that flatters you may betray you.

    del.icio.us digg technorati YahooMyWeb Reddit FURL BlinkList

    Member Center

    Welcome Guest

    Register
    Login

    Search  
    E-mail & IM 
    New & Updated Articles


     
    Travel Services




    Battle of the Islands


    Venezuela
    Current Leader

    Jamaica
    2nd Most Active

    vutjebal
    Most Active User



    Top Links
    Motorola RAZR V3 for T-Mobile + $50.00 Cash Back
    Caribbean Specialty Foods
    Flagline.com
    Caribbean Black Singles
    Landmark Education
    Saveur Creole
    Apply for a Credit Card
    more links...



    Latest News

    News Headlines  
    Caribbean
    Latin America  
    North America  
    Cricket  
    Football (Soccer)  
    World at a Glance  
    and more...




    Complete Hosting Guide

    Life is Transformational

    Visionary Learning Studios


    HOME | Culture | E-mail | Community | Resources | Disclaimer | CaribProud.com | Advertising | About Us
     Copyright © 1998-2010 CaribbeanChoice.com. Inc.  All rights reserved.