Euro/Dollar Parity & Summer Travel

Euro/Dollar Parity & Summer Travel

August 10, 2022
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Summer travel has picked up this year. Airports are packed and thousands of flights have been canceled or postponed due to weather or other conditions. Over the weekend, more than 2,000 flights had been delayed across the United States by midday Monday after more than 8,000 were delayed on Sunday.

Now, the good news. If you’re headed to Europe this summer or early fall, you may notice that now you will get more bang for your buck.

Why is that?

For the first time in almost 20 years, the U.S. dollar and the euro have reached parity (equality). Souvenirs will be cheaper for Americans, but Europeans coming this direction may feel the pinch of more expensive goods and services.

The U.S. dollar has strengthened against the euro in part because of differences in monetary policy. The U.S. has been raising rates to slow inflation, while the European Central Bank (ECB) has been hesitant for fear of slowing economic growth.

However, with the ECB expected to raise short-term rates for the first time in over a decade, euro/dollar parity may be short-lived.

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