Travellers might need to cash in on their trip to Turkey sooner rather than later as Simon Harvey, head of FX analysis at currency forecaster Monex Europe tells Delano that the favourable exchange rate in the EU’s south-eastern neighbour might soon be eroded by a rise in prices.
“Unfortunately for euro-based travellers, the recent collapse in EUR-USD has meant that on a purchasing-power basis there aren’t too many locations that are profitable to go to (that are sunny anyway),” says Harvey.
He highlights the CE-3 region of Poland, Hungary, and the Czech Republic as one where travellers would consistently get the most bang for their buck. Outside of Europe, Brazil and Mexico also provide good alternatives for European travellers.
The most expensive places to go spend one’s euros outside the EU’s borders are Norway, Switzerland and Australia. This is largely due to the substantial difference in the cost of living. The higher cost of goods in those countries also add to the inconvenience created by the unfavorable exchange rates.
Inflation has had a notable impact on the euro’s performance. “With monetary policy highly sensitive to how inflation expectations deviate from central banks’ targets as current inflation levels hit multi-decade highs, inflation expectations is arguably what is prompting central banks to hike rates despite tentative growth conditions,” explains Harvey.