Your dollar now buys about 10% less overseas in 2026

Exchange Rates Force Americans to Rethink Travel

If you’re planning a trip to Europe this year, your wallet is in for a shock. The U.S. dollar dropped about 11% against major currencies in the first half of 2025, the steepest fall since 1973.

Experts at Morgan Stanley say it could slide another 10% by the end of 2026.

That means everything from hotels to coffee costs more when you’re paying in euros or pounds.

Some Americans are canceling international plans altogether, while others are hunting for destinations where their money still goes far.

$500 Now Gets You 400 Euros

The math tells the story. In 2024, $500 would have gotten you about 463 euros on average.

Head into 2026, and that same $500 only buys around 400 euros. That’s a 14% drop in purchasing power before you even book a hotel.

A dinner that cost $50 last year now runs closer to $57.

Multiply that across a two-week trip, and you’re looking at hundreds of extra dollars just to get the same experience you had before.

One in Seven Going Domestic Instead

Survey data from mid-2025 found that about 14% of American travelers are switching from international trips to domestic vacations specifically because of exchange rates.

Another 8% said they’re picking countries where the dollar still holds strength. The shift is already showing up in flight searches.

Domestic spots like Bozeman, Montana, Key West, and Steamboat Springs, Colorado, saw searches more than double compared to 2025. Paris, London, and Athens all saw drops.

Tariffs Made the Dollar Weaker

Here’s what surprised economists. When the U.S. announced broad tariffs in April 2025, most expected the dollar to strengthen.

Instead, it dropped. Trade partners retaliated, investors pulled money from U.S. stocks, and the uncertainty made foreign buyers nervous about holding dollar assets.

The dollar lost more than 10% against other currencies in the first half of the year. Trade policy that was supposed to help American manufacturing ended up making overseas travel more expensive.

20% May Skip Abroad Altogether

If prices keep climbing, one in five Americans say they’ll stop traveling internationally and stick to domestic trips.

A YouGov survey found that 60% of respondents didn’t travel abroad at all in 2025, and 43% of those who did said rising costs directly affected their plans.

Lower-income Americans felt it the hardest, with 75% staying home. The desire to see the world is still there, but the budget to do it is shrinking.

Off-Peak Travel Saves the Most

The top strategy Americans are using to fight rising costs is simple: don’t travel when everyone else does. About 45% of surveyed travelers said they plan to avoid peak seasons in 2026 to lock in lower prices.

Shoulder season, the weeks between high and low season, can cut rates by up to 40% at some hotels. January, February, and late fall offer the best deals for flights and accommodations.

The crowds thin out, and your dollar stretches further.

Japan Still Offers Good Value

Despite the dollar’s drop against the euro, it’s still strong against the Japanese yen.

The yen has been sliding for years, and at around 144 yen to the dollar, Japan is more affordable for Americans than it was a decade ago.

A visit to Tokyo’s Shinjuku Gyoen National Garden costs about $3.50. Street food, trains, and even mid-range hotels run cheaper than equivalent experiences in Western Europe.

If you’ve always wanted to see cherry blossoms or eat your way through Osaka, now is a good time.

Brazil Hits Record Tourism Numbers

The Brazilian real dropped more than 20% against the dollar in late 2024 and hasn’t fully recovered. That collapse turned Brazil into one of the best-value destinations in the Western Hemisphere.

The country reported 3.7 million international visitors in the first quarter of 2025, up nearly 48% from the same period the year before.

Rio, Patagonia’s edge, and the Amazon are all in reach for Americans who want adventure without European prices. Brazil’s government expects to become the most visited country in South America by 2027.

Canada Is Cheaper Than Ever

The Canadian dollar is sitting near a 20-year low against the U.S. dollar, with the exchange rate hovering around 1.39 to 1.50 Canadian per American dollar.

That makes Banff, Vancouver, Montreal, and the Rockies far more affordable than usual.

Flights to Canada are also as cheap as they’ve been in years.

If you want mountains, wildlife, and world-class cities without crossing an ocean, Canada is the best deal on the continent right now.

Europe Feels Overpriced to Many

When asked about value for money, American travelers ranked European destinations lower than last year.

Italy, France, the UK, Germany, and Spain all saw more travelers saying value had gotten worse.

Italy still leads as the most considered international destination at 36. 4%, but that number is down 2.4 points from the previous year. The UK dropped 3.2 points.

Meanwhile, Canada, Mexico, Japan, and the Dominican Republic all saw higher shares of travelers saying they felt like better deals.

Booking Early and Staying Budget

Beyond picking different destinations, Americans are changing how they plan trips entirely. About 36% say they’ll book flights further in advance to lock in lower prices.

Another 32% plan to choose less expensive countries from the start.

On the accommodation side, 30% will stay in budget hotels, 22% will crash with family or friends, and 18% plan to skip major tourist hubs.

Some are cutting back on restaurant meals and excursions, trimming the extras to afford the trip at all.

Your Dollar Still Works Somewhere

The weak dollar doesn’t mean you have to stay home. It means you have to be smarter.

Japan, Brazil, Canada, Vietnam, South Africa, and Portugal still offer strong value. Booking in shoulder season, flying midweek, and avoiding the biggest tourist cities all help stretch your budget.

The dollar may keep falling into 2026, but travelers who plan ahead and pick the right destinations can still see the world without emptying their savings account.

This article was created with AI assistance and human editing.

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