Dollar-friendly countries-- They're few and far between this year

By Kristen Gerencher, <a href=cbs.marketwatch.com>CBS.MarketWatch.com Last Update: 12:01 AM ET June 13, 2003

SAN FRANCISCO (CBS.MW) - Americans looking for foreign getaways where their money goes far are hard-pressed this year-- even Russia and India's currency has gained on the greenback.

Few nations think enough of the relative state of the U.S. economy to pay more for the dollar than they did a year ago. Count out all the major tourist destinations in Europe, as well as Japan.

"Even the Turkish lira, which had been a substantially weak currency last year, actually appreciated against the U.S. dollar this year," said Tom O'Malley, head of currency portfolio management at Barclays Global Investors in San Francisco.

"Your dollar still will get you a lot in that country, but it won't get you as much as it did," he said, noting that at the end of last June, $1 USD would have bought about 1.6 million lira compared with today's slightly more than 1.4 million.

The same is true for India, where you'll get 46.5 rupees to the dollar, said Chuck Butler, president of Everbank World Markets in St. Louis, Mo. "A year ago it was at 49. Even countries that don't have economies worth a shake of salt are gaining against the dollar."

So where can you go to get a better exchange rate than last year? Mostly they're places that appeal to adventure and environmental tourists.

Nations trading lower against the dollar in the last 12 months include Nigeria, Colombia, Egypt, Venezuela, Costa Rica, Uruguay, Zimbabwe and Jamaica, Butler said.

"If you want to go to Zimbabwe, their dollar is down 93 percent against the U.S. dollar, but I don't know that they have huge caravans of people going over there," he said.

Americans can get 58 Jamaican dollars to one U.S. dollar this year compared with 47 a year ago -- a 17 percent discount, Butler said.

Mexico as exchange-rate star

While the U.S. dollar has slid against many foreign currencies in the last year, travelers itching to go abroad without paying a premium still have a few corners of the globe they can explore - and one is close to home.

Americans will find the biggest bang for their U.S. buck in the opposite direction of Canada, last year's premiere currency destination.

While the U.S. dollar has taken a plunge against that of its northern neighbor, the Mexican peso has slipped, offering Americans more than 8 percent off last year's exchange rate, O'Malley said.

"If last year was the time to go north of the border, if there's any place left where the dollar is still as strong as it had been, it's south of the border in Mexico," he said.

"Right now you get about 10.5 pesos to the dollar, which is near the all-time exchange rate high, which was about 11.25 in March of this year," he said. Last year Mexico offered 9.5 pesos to the dollar.

Canada, on the other hand, is now offering Americans 1.35 to the U.S. dollar compared with 1.5 to 1.62 last summer, O'Malley said. "Things will be at least 10 to 20 percent higher in Canada this year compared with last year."

Europe gets pricey

Travelers watching their pocketbooks may have to kiss dreams of visiting Paris and Rome goodbye this summer. The euro, the shared currency of 13 European nations, is up 24 percent since last year, and Scandinavian nations such as Sweden and Denmark are up 25 percent, Butler said.

Even the South Pacific has marked up its exchange rate, to the tune of 17 percent for New Zealand and 16 percent for the Australian dollar, he said. "There's a roll call here and it's pretty devastating."

O'Malley agreed. "Europe has gotten much more expensive due to the appreciation of the euro against the dollar. For much of the second half of last year, the euro and the dollar were at about parity."

It now takes $1.17 to buy one euro, he said. Meanwhile, South America's rise against the dollar has been less remarkable.

"From December to June of this year, the Brazilian real has appreciated 17 to 20 percent," O'Malley said. "This time last year it was at about the same rate as it is now -- about 2.9 real to the dollar."

"South America has always been a fairly inexpensive place as far as what the dollar will get you. That's still true today. The dollar just won't go as far as it did, say, six months ago." Kristen Gerencher is a reporter for CBS.MarketWatch.com in San Francisco.