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It’s a good time to be an American traveling abroad.
The value of the U.S. dollar has been at its strongest in years relative to many major global currencies of late— meaning travelers can buy more overseas than in the recent past.
Put another way, Americans are effectively getting a discount on hotels, car rentals, tours and other goods and services denominated in many foreign currencies.
But it’s unclear how long the good times will last. Some may wonder: Should I act now to lock in a favorable exchange rate?
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“I’d pull the trigger now,” said Aiden Freeborn, senior editor at travel site The Broke Backpacker.
“You could hedge and wait to see if things improve, but that could backfire,” he added. “Don’t be too greedy; accept the fact this is a very strong position.”
Here’s what to know and how to take advantage.
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Just how much of a discount are travelers getting right now? Let’s look at the euro as an example.
The euro — the official currency for 19 of the 27 European Union members — has been falling in value over the last year or so and hit parity with the U.S. dollar on July 13, for the first time since 2002. Parity means the two currencies had a 1:1 exchange rate.
Americans were still getting a roughly 13% discount from a year ago as of market close on Tuesday, despite a slight rebound off that multi-decade low.
“The exchange rate right now is ridiculous,” Charlie Leocha, chairman of Travelers United, an advocacy group, said of the euro’s depressed level. “It makes everything in Europe that used to be expensive not that expensive.”
But the dollar’s strength is broader than just the euro.
For example, the Nominal Broad U.S. Dollar Index gauges the dollar’s appreciation relative to currencies of the U.S.’ main trading partners, like the Canadian dollar, British pound, Mexican peso and Japanese yen in addition to the euro. It’s up more than 9% in the last year.
Further, the index is around its highest point dating to at least 1973, according to Andrew Hunter, senior U.S. economist at Capital Economics. There’s one exception: the period from March to May 2020, when international travel was largely inaccessible due to the Covid-19 pandemic.
“I think the big picture is, now is probably a good time to go abroad,” Hunter said. “Now is a good time to buy foreign currency, basically.”
The strength of the dollar is largely attributable to three factors, Hunter explained.
Perhaps the most consequential is the U.S. Federal Reserve’s campaign to raise interest rates (i.e., borrowing costs). The central bank has been more aggressive than others around the world, Hunter said; the dynamic creates an incentive for international investors to keep funds in dollar-based assets since they can generally earn a higher return.
Further, a surge in oil prices this year hurt the growth prospects in some developed countries (especially in Europe) relative to the U.S. And economic uncertainty (due to factors like inflation and recession fears and the war in Ukraine) has led investors to flock to safe-haven assets like the U.S. dollar.
While the U.S. dollar will likely remain strong for another six months or so, it’s likely at or near its peak relative to other major currencies given prevailing economic dynamics, Hunter said — with the caveat that currency moves are notoriously difficult to predict.
“You’ve always got the uncertainty of what will happen in the future,” he added. “The dollar could strengthen even further, but it could fall back.”
Row Houses on Weissgerbergasse in Nuremberg, Germany.
Sakchai Vongsasiripat | Moment | Getty Images
Of course, this isn’t all to say Americans will reap financial rewards the world over.
But tourists planning or considering a trip to a country where the dollar is historically strong can lock in that favorable exchange rate by booking a hotel, rental car or other service today instead of deferring the cost, according to travel experts.
This is especially worthwhile for those with a trip at least three months away, Leocha said.
“You can pay in advance, and sometimes you get a discount for paying in advance — so you get a discount and the low exchange rate,” he said.
Be aware: In some cases, you may owe an additional foreign-transaction fee for a credit-card purchase overseas. Some travel cards eliminate these fees, though, which generally amount to 3% of the purchase price, Leocha said.
Fees may depend on where the company you’re transacting with is based. There isn’t a foreign transaction fee if the purchase is through a third-party U.S. entity like Expedia, but there often is one if booked directly through a foreign entity like the actual hotel, Leocha said.
Travelers can also convert cash ahead of a trip but should generally only do so if the trip is several months away, according to travel experts.
That’s because providers like banks typically offer less generous exchange rates — meaning a customer may be better served by waiting until arriving at their destination country and making purchases with a credit card, especially if it doesn’t carry a foreign transaction fee.
While abroad, merchants may offer travelers the choice of making a purchase “with or without conversion” or according to some similarly worded prompt. Travelers should decline that conversion offer — meaning they should opt to do the transaction in the destination currency instead of convert that price into dollars —in order to get the best exchange rate, experts said.
Travelers who’d prefer to convert to cash can hedge their exchange-rate bets by converting half their estimated expenditure now and waiting until later (or their arrival) to covert the rest, Freeborn said.
Kim Kardashian, Floyd Mayweather crypto scam lawsuit dismissed
A federal judge on Wednesday dismissed a proposed class action lawsuit by investors against the founders of the cryptocurrency EthereumMax, as well as celebrity endorsers including Kim Kardashian and boxer Floyd Mayweather Jr. over their promotion of the cryptocurrency on social media.
Investors who bought EMAX tokens alleged they had suffered losses after taking the word of the celebrity influencers about the value of the crypto. The suit claims the defendants engaged in a conspiracy to artificially inflate the value of the EMAX tokens.
Judge Michael Fitzgerald wrote that he recognized that the lawsuit’s claims raised legitimate worries about “celebrities’ ability to readily persuade millions of undiscerning followers to buy snake oil with unprecedented ease and reach.”
“But, while the law certainly places limits on those advertisers, it also expects investors to act reasonably before basing their bets on the zeitgeist of the moment,” wrote Fitzgerald, of the Central District of California.
The judge found that the plaintiffs’ allegations were insufficiently backed, especially “given the heightened pleading standards” for fraud claims, according to his ruling in U.S. District Court in Los Angeles.
In addition to Kardashian, Mayweather and former Boston Celtics star Paul Pierce, the defendants in the case included Steve Gentile and Giovanni Perone, the co-founders of EthereumMax, and Justin French, a consultant and developer for the cryptocurrency, court documents state.
Fitzgerald in his ruling said he would allow lawyers for the plaintiffs to refile their suit after amending some of their claims under a number of the statutes cited in the original complaint, which included the Racketeer Influenced and Corrupt Organizations Act, also known as RICO.
“We’re pleased with the court’s well-reasoned decision on the case,” Michael Rhodes, a lawyer for Kardashian, told CNBC.
The dismissal came weeks after investors in fallen crypto exchange FTX filed a class-action lawsuit against former FTX CEO Sam Bankman-Fried and celebrity advertisers for the company, among them NFL superstar Tom Brady, for allegedly overstating the value of the crypto tokens in promotional messaging.
And the ruling came two months after Kardashian agreed to pay $1.26 million, and not to promote cryptocurrency for three years, to settle claims by the SEC for her failure to disclose a $250,000 payment touting EthereumMax on her Instagram account.
Fitzgerald in his ruling Wednesday said the EthereumMax lawsuit reflects a broader conflict surrounding celebrity and influencer promotional schemes.
“This action demonstrates that just about anyone with the technical skills and/or connections can mint a new currency and create their own digital market overnight,” Fitzgerald wrote in his dismissal.
Investors sued EthereumMax and its celebrity advertisers in January after a slew of influencers started snagging sponsorships to promote cryptocurrencies to their millions of social media followers.
Kardashian’s Instagram post in June 2021 had written, “Are you guys into crypto??? This is not financial advice but sharing what my friends told me about the Ethereum Max token.”
Her post included “#ad” at the bottom, indicating she had been sponsored. But it did not disclose her $250,000 payment from EthereumMax.
Mayweather promoted EMAX at a boxing match and a large Miami bitcoin conference in June 2021.
But by January, the cryptocurrency had lost 97% of its value.
Fitzgerald at a hearing last month indicated he was inclined to dismiss the case.
Bloomberg News, in an article about that hearing, said that an attorney for the plaintiffs in the suit asked the judge to allow him to revise the suit’s racketeering claims to show how the statements by the celebrity defendants harmed the investors.
“If plaintiffs had known the true facts related to the promoters’ financial interest in the tokens, and that they were being paid to shill these tokens, they wouldn’t have paid as much for the tokens as they did,” the attorney, John Jasnoch, told Fitzgerald, according to a transcript cited by Bloomberg.
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How the U.S. became a global corn superpower
The United States has just about 90 million planted acres of corn, and there’s a reason people refer to the crop as yellow gold.
In 2021, U.S. corn was worth over $86 billion, according to calculations from FarmDoc and the United States Department of Agriculture.
According to the USDA, the U.S. is largest consumer, producer and exporter of corn in the world.
“We’re really good at [corn production],” Seth Meyer, chief economist at the USDA, told CNBC. “And that’s why you see big acres, big demand, export competitiveness.”
It’s not just what we eat.
“We turbocharged the value of corn through the application of science,” Scott Irwin, agricultural economist and professor at the University of Illinois, told CNBC.
Corn is in what we buy, including medications and textiles, and corn is turned into ethanol, which helps to fuel cars across the nation.
The rest of the world relies on U.S. corn, too.
At $2.2 billion in 2019, corn is the most heavily subsidized of all crops in the country.
“A lot of these subsidies … do get embedded into the cost of farmland and they essentially bid up the price of farmland marginally,” Joseph Glauber, senior research fellow at the International Food Policy Research Institute and former USDA chief economist, told CNBC. “So the benefits accrue largely to those who own land.”
The federal crop insurance program’s net spending is forecast to increase to nearly $40 billion from 2021 through 2025, according to the Congressional Budget Office.
At the same time, farmland values have reached all-time record highs.
“Do we get the corn acres because we’ve got the support, or do we have the support because we have the corn acres?” Meyer said, posing the chicken-and-egg question about the nation’s grain superpower.
Watch the video above to learn more about how corn fuels the U.S. economy from its people to its vehicles, the power of the corn belt states, the role of subsidies and where government policy for the industry may go from here.
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