Dollar Hits Record Low Against Euro

Economy Government Europeans are flocking to the US as the euro has risen to a new high against the dollar.

by CBS

Published: Wed, April 23, 2008 - 12:13 pm CST Last Updated: Wed, April 23, 2008 - 12:24 pm CST

With the euro reaching record highs on Tuesday against a weakened dollar, American tourists in Europe on Wednesday were concerned about the poor exchange rate.

Tourists visiting the Netherlands complained about the high prices in Europe.

"I don't know how you can afford the food prices," said Canadian tourist Carol Cameron, while visiting the Keukenhof tulip park in Lisse.

In Rome, Italy, an American tourist who had visited Europe complained that prices to her were "definitely more expensive."

"Lot harder to buy things than it has in the past," Jeane Rose told AP Television.

In the Grand Place on Wednesday afternoon in Brussels, Sharon, a tourist from Alaska, also expressed her concern.

"I'm astounded," she said. "We were pretty shocked because we'd been spoiled and used to our dollar being very strong. Usually we go to other countries and our dollar is worth more, and this time it's about half."

Another American tourist, Charles from Colorado, acknowledged the decline, but has not let it affect his European holiday.

"I think everything over here is more expensive," he said. "But that's the way it is, so if you're going to come over here, you just have to expect it and live with it."

American tourists are not the only ones feeling the pinch of the weakening dollar, but American businesses in Europe are as well.

Marcel Claes, a Chief Executive at the American Chamber of Commerce in Belgium, said that US businesses are struggling to compete with the rising euro and the cost of operating in a higher priced environment.

"For US companies with operations in Europe, the situation is such that, of course, they are operating in a higher cost environment, especially with the rising Euro, and that's why their competitiveness is suffering a little bit, from that higher euro," he said.

However, while the weak dollar may diminish the purchase power of US visitors to Europe, some commentators have noted a rise in the number of Europeans travelling to the states.

Olivier Vandenbroucke, Managing Director at USA Travel, a specialist travel agency in Brussels, said that his business has seen a dramatic increase in European passengers going to America.

"From the beginning of the season, we've seen a huge rise in the number of passengers travelling to the United States," he said.

"The euro/dollar exchange rate is probably one of the reasons, and the other reason would probably be the media talking about the euro/dollar thing and how the dollar is now cheap."

The euro was down against the US dollar on Wednesday, a day after it breached 1.60 US dollars to a record high.

In late-morning trading the 15-nation currency bought 1.5968 US Dollar, below the high of 1.6018 US dollars it reached on Tuesday after a pair of European Central Bank governors suggested that interest rates would go higher if inflation was not stemmed.

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