Question:

Do you think the U.S. dollar will bounce back up?

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Im planning on backpacking Europe for 2 months next summer. And I was wondering what are the chances of the dollar strengthening? New president, we might even be pulling our soldiers out of Iraq.

Also any experiences of backpacking in Europe is greatly appreciated. I am not into the tourist destinations, I want to experience true Europe. I will be flying into Bristol, U.K. because I have distant relatives who currently reside there.

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3 ANSWERS


  1. Currency moves, once started, tend to continue over longer periods, so I would expect the dollar to continue to strengthen somewhat in the next few months. There are no guarantees, of course.


  2. In the next year? It might strengthen, but the problem is, so will the Euro. As it stands, the British Pound, while strong against the dollar, is also weak against the Euro. The unification of European economies under the EU has created a real economic powerhouse.

    The real thing that's causing problems, at this point, is the housing market. The reason the housing bubble happened was that global investment banking started favoring mortgages as an investment. With those being much less attractive, traditional conservative investments become appealing. And one of the most classic conservative investments is the US Treasury Bond. Which is to say, loaning money to the US government. Which devalues the dollar.

    I would not expect the dollar to strengthen for next summer, and would plan on the current exchange rate holding.

  3. Sorry mate i did all my backpacking in the 70s times have changed, but i think by then the Pound Euro And  Dollar will be pretty much the same as before both of our recessions.

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