Countries where the US dollar is weak, at least recently
Recently we discussed the long list of countries around the world where the US dollar is strong, and it showed that as long as you can afford the flight, you can spend time in some of the planet’s most interesting places on a modest budget. Of course, there are many other places (especially in Europe) where the US dollar doesn’t seem to go far at all.
Below is a list of the countries and currencies that put the greenback to shame, at least in the past 5 years or so. Some of these countries have always been expensive for everyone, but others are ones that were once reasonably priced and are no longer.
There’s good news here for anyone living in a country on the list below, since now your travel money goes even further, so your choices might not be limited to the aforementioned cheap destinations list.
Japan – Japanese yen
(average annual exchange rate for each year versus the US dollar. Current rate is as of December 3, 2010.)
- 2005: 110.09
- 2006: 116.29
- 2007: 117.77
- 2008: 103.42
- 2009: 93.58
- 2010: 88.16
- Current: 83.73
This one has been a headline in the financial news for the last couple of years. As you can see, the US dollar has declined almost 30% against the yen since 2007, and most things in Japan seemed expensive back then. Interestingly though, prices in Tokyo were often discussed in a misleading way.
To make a point, you’d often hear about the US$20 hamburger at the hotel restaurant, but you’d rarely hear about the US$5 bowl of noodles and chicken that most of the locals were slurping up. In other words, if you adjust your travel strategy, Japan won’t drain your bank account, yet it still might be better to wait for a better exchange rate in years to come.
The Euro Zone
(annual average versus the US dollar)
- 2005: 0.80
- 2006: 0.80
- 2007: 0.73
- 2008: 0.68
- 2009: 0.72
- 2010: 0.75
- Current: 0.76
To those of us who traveled to Europe frequently from 2000 to 2002 (when the US dollar was worth over €1), the current euro exchange rate still stings. It’s been especially volatile lately due to the fallout of the global financial crisis, and it could continue to jump in either direction for some time to come, but still things are far better for Americans than in 2008, and about in the middle of its recent range.
Europe can be expensive for Americans, but that has more to do with where you go rather than the currency. For example, a hotel room or a glass of beer can cost twice as much or more in Paris as it does in Madrid.
United Kingdom – British pound
- 2005: 0.55
- 2006: 0.54
- 2007: 0.50
- 2008: 0.54
- 2009: 0.64
- 2010: 0.65
- Current: 0.64
While it’s true that the United Kingdom, and especially London, can feel very expensive for Americans, the US dollar is near its 5-year peak at the moment, and far better than the dreary days in 2007 when it took two greenbacks to buy a pound.
So this is probably a pretty good time to plan a trip to the UK if you are American, and it’s also worth remembering that most national museums are free to enter, so it’s actually possible to keep entertainment expenses low regardless of the exchange rate.
Australia – Australian dollar
- 2005: 1.31
- 2006: 1.33
- 2007: 1.19
- 2008: 1.20
- 2009: 1.28
- 2010: 1.10
- Current: 1.03
Almost everyone raves about Australia once they visit, but it hasn’t been cheap for most of us for a long time. Recent strengthening by the Australian dollar has pushed things to a level where Sydney might be more expensive than London.
Lower trans-Pacific airfares have helped the situation a bit in recent years, but still it seems likely that the currency pendulum will swing the other way again in the coming years, so the trip might be easier to enjoy then.
New Zealand – New Zealand dollar
- 2005: 1.42
- 2006: 1.54
- 2007: 1.36
- 2008: 1.42
- 2009: 1.60
- 2010: 1.39
- Current: 1.32
New Zealand is another that always gets raves from visitors, and it has always been at least a bit cheaper than Australia. That continues to be the case, but their currency has been on a nice run in the past two years, so it’s gotten more expensive for most international visitors.
Fortunately, most of the attractions in New Zealand (not including Auckland) are nature-based, and camping is extremely popular as well, so it’s quite easy to have a great time without spending much each day.
Brazil – Brazilian real
- 2005: 2.43
- 2006: 2.17
- 2007: 1.94
- 2008: 1.83
- 2009: 1.99
- 2010: 1.76
- Current: 1.70
This one hasn’t gotten much attention in the past years, but Brazil’s currency has quietly risen quite a bit against just about every other country. Thanks to this, it’s now probably the most expensive country in South America by a fair degree, which wasn’t the case a few years ago.
The cities couldn’t be more different, but now Rio de Janiero is more expensive than Buenos Aires, in spite of generally lower quality for most things. Still, Brazil is incredible and still reasonably priced, so it’s probably not worth waiting for things to change.
Canada – Canadian dollar
- 2005: 1.21
- 2006: 1.13
- 2007: 1.07
- 2008: 1.07
- 2009: 1.14
- 2010: 1.03
- Current: 1.00
For a long time Americans loved visiting Canada partly because it felt like everything was ‘on sale’ by 20% or so. The prices on things were similar, so the exchange rate difference just gave us more money. Those days are over, for now.
Generally speaking, the US and Canada share similar costs for everyone now. Toronto is similar to Chicago, and Vancouver is similar to Seattle. So it’s not that the US dollar is ‘weak’ in Canada, but more that it’s not the bargain it had been recently.
Switzerland – Swiss franc
- 2005: 1.25
- 2006: 1.25
- 2007: 1.20
- 2008: 1.08
- 2009: 1.09
- 2010: 1.05
- Current: 0.99
Switzerland is lovely, and it’s always been expensive for just about everyone. Their famously strong banking system and independent currency have been soaring lately, making the place even harder to afford.
When recently comparing the price of a 3-kilometer taxi ride around the world, the most expensive by a large margin was in Zurich.
Czech Republic – Czech krone
- 2005: 23.92
- 2006: 22.55
- 2007: 20.26
- 2008: 17.03
- 2009: 19.00
- 2010: 19.07
- Current: 18.89
This on makes less sense than some of the others, but the fact is that the Czech currency has continued to rise against almost everything else. Prague, formerly almost as famous for its low prices as for its beauty, can be rough on the budget lately, partly because inflation as well.
In the early part of this century you could get an amazing pint of local lager for around 50 US cents, but now that price is almost three times as much. So for what you get it’s still cheap, but maybe not for much longer.
Denmark – Danish kroner
- 2005: 5.99
- 2006: 5.94
- 2007: 5.44
- 2008: 5.09
- 2009: 5.35
- 2010: 5.62
- Current: 5.64
Interestingly, the Danish currency hasn’t fluctuated all that much in the past six years. Still, Copenhagen is one of Europe’s most expensive (and lovliest) cities.
Norway – Norwegian kroner
- 2005: 6.44
- 2006: 6.41
- 2007: 5.86
- 2008: 5.64
- 2009: 6.28
- 2010: 6.05
Norway has a similar pattern to the other Scandinavian countries, with its currency never moving too far against the US dollar. Still, Oslo is generally even more expensive than Copenhagen or Stockholm, so it’s a budget buster for many.