Americans traveling to Europe in 2025 and 2026 may find bargains due to the weakening euro against the U.S. dollar. President-elect Donald Trump’s policies, such as tariffs, are expected to boost the U.S. dollar and depreciate the euro. Economists anticipate the euro to hit parity with the dollar, making goods and services in Europe more affordable for American tourists.
Factors influencing the euro-USD exchange rate include tariffs, interest rates, and trade policies. Trump has proposed tariffs on global trading partners, including the European Union, which could weaken Europe’s economy and devalue the euro. The interest-rate spread between the U.S. and Eurozone is expected to widen, with the U.S. Federal Reserve keeping rates higher to combat inflation.
The U.S. economy has been performing better than Europe, leading to a preference for safe-haven assets like U.S. Treasury bonds. Financial markets dislike uncertainty, and if Trump administration policies unsettle markets, investors may flock to U.S. dollars, further strengthening the currency.
While there is a risk of Europe retaliating with tariffs or raising consumer prices, economists believe Europe favors free trade. Travelers can take advantage of the weak euro by delaying purchases until next year to benefit from the favorable exchange rate. Ultimately, the dynamic between tariffs, interest rates, and economic conditions will determine the strength of the euro against the dollar in the coming year.
Photo credit
www.nbcnews.com
:max_bytes(150000):strip_icc():focal(541x114:543x116)/Brooke-Shields-katie-holmes-jennifer-lopez-angelina-jolie-112724-30e116cdb6f549b7a61eadaf57a33340.jpg "This Season’s Must-Have Comfy Coat Styles Worn By Celebrities")
