Keep An Eye On The Currency Exchange Market And Save Money When You Travel

Keep An Eye on​ the​ Currency Exchange Market And Save Money When you​ Travel
Monitoring the​ currency exchange rate is​ very important if​ you’re planning to​ go on​ a​ vacation and would like to​ stay within your set budget and save money .​
Let us understand what exactly currency exchange rate means .​
In general,​ depending on​ the​ US dollar,​ most of​ the​ other currencies are calculated in​ value and are either more or​ less than the​ value of​ the​ US dollar .​
For example,​ a​ Canadian dollar would be worth around 85 percent of​ the​ US dollar .​
Similarly,​ the​ British Pound is​ worth two US dollars .​
However,​ owing to​ the​ fluctuating market conditions,​ one day the​ British Pound could be worth two dollars while on​ the​ next,​ it​ could be worth more than two dollars.
There are two types of​ currencies – free floating and pegged .​
a​ currency that is​ determined by the​ government of​ the​ country in​ relation to​ the​ another currency is​ called a​ pegged currency .​
Inthe 1980’s,​ the​ Hong Kong dollar was fixed with respect to​ the​ US dollar .​
On the​ other hand,​ a​ free-floating currency is​ permitted to​ change in​ value with respect to​ all other currencies in​ the​ foreign exchange market .​
When referring to​ currency,​ people often discuss issues like the​ real exchange rate and the​ nominal exchange rate .​
The actual exchange rate is​ the​ rate for which products of​ a​ country can be traded for the​ products and services of​ another country .​
The nominal exchange rate on​ the​ other hand,​ is​ the​ value at​ which the​ currency of​ a​ certain country can be traded with that of​ another .​
Practically speaking,​ currency exchange rates generally change from one country to​ another and make travel and tourism easier and more attractive .​
So,​ if​ you’re planning on​ going on​ a​ vacation and there are several countries that you​ plan to​ visit,​ it​ is​ advisable to​ keep an​ eye on​ the​ current exchange rates .​
This could help you​ save money .​
For example,​ New York City is​ always full of​ tourists from France,​ Japan,​ the​ UK and Germany at​ different times of​ the​ year .​
This is​ only because at​ certain times the​ exchange rates favor the​ Europeans or​ the​ Japanese,​ making it​ cheaper for them to​ visit America than at​ other times .​
In recent years,​ the​ currency exchange rate is​ seen to​ have worked in​ favor of​ all the​ European nations .​

Before the​ Euro came into existence,​ Austrian currency was the​ Schilling,​ Germany the​ Deutsche Mark,​ Italian Lira,​ Switzerland had the​ Swiss Franc and France the​ Franc .​
In the​ early 80’s the​ currency exchange rate was two and a​ half Schillings for a​ dollar while five French Francs made one US dollar .​
On the​ other hand,​ the​ Deutsche Mark fluctuated anywhere from 1.7 Marks to​ 2.5 Marks to​ the​ dollar .​
So,​ when the​ US dollar was at​ 2.5 Marks,​ the​ Americans would trade in​ their dollars for German Marks to​ stay ahead.
Watching out for the​ fall or​ rise in​ exchange rates is​ always beneficial for tourists who would like to​ travel and at​ the​ same time save money .​
Even if​ you​ are only thinking of​ hopping across the​ border to​ visit family or​ are planning on​ flying to​ Mexico or​ Canada,​ knowing and understanding the​ nominal exchange value of​ another country is​ very important .​
So,​ remember to​ plan your vacation at​ a​ time when the​ fluctuation in​ exchange rates is​ most likely to​ help you.
Keep An Eye On The Currency Exchange Market And Save Money When You Travel Keep An Eye On The Currency Exchange Market And Save Money When You
Travel Reviewed by Henda Yesti on August 04, 2018 Rating: 5

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