U.S. dollar hits all-time low compared with the euro

Lacey Crisp

University student Paul Ruder said he has a lot of memories and pictures to remind him of his semester in Ireland, but for now, he also has bills.

The U.S. dollar is at an all-time low compared to the euro, and economists are forecasting the problem will worsen before it gets better. One euro equals approximately $1.30.

Terry Roe, an economics professor at the University, said this is a trend that won’t end soon.

“The dollar has dropped about 34 percent in the past year and a half,” he said.

Roe said that means U.S. travelers in Europe will pay 34 percent more for hotels, transportation and other expenses.

But Ruder said he did not take into account exchange rates before he left for Dublin, Ireland.

“I ended up cutting back a lot,” Ruder said. “I skipped a few trips, because I just didn’t have enough money to go, and I thought I would have (had the money).”

He said he now pays closer attention to currency rates.

Jodi Malmgren, director of advising at the Learning Abroad Center, said students are advised about how expensive studying abroad is before they leave the country.

“When a student applies for a program, we give them a budget estimate including airfare, textbooks and tuition,” Malmgren said.

She said it is usually the students’ out-of-pocket expenses that end up costing so much.

“We have a section on handling money and the kinds of expenses students can expect while they are abroad,” Malmgren said.

She said students appear to be conscious of the monetary demands before they leave the United States.

“I have definitely seen an increase in the number of students asking about money and the currency rates,” Malmgren said.

Roe said the euro is replacing the dollar as the standard currency.

He said the world has become more integrated.

“The U.S. is a major market for foreign investors to invest in,” he said.

Roe said the United States and Japan account for 45 percent of the world’s trade.

“The United States imports more than it exports, and it pays countries with U.S. dollars,” Roe said. “Because the countries would be losing money by exchanging the dollars, they buy goods with the dollar, or invest in U.S. bonds.”

He said the United States cannot run such a large federal deficit and it needs to stop importing more than it exports.

He said the dollar has been forecasted to go down another 30 percent, although he doesn’t believe it will decrease by that amount.

“The U.S. is going to have to raise its interest rates,” Roe said. “That will dampen U.S. economic growth.”

Roe said he suggests students going on spring break consider Thailand or Turkey because the dollar has not depreciated there.