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Economic bright spot: bargain-hunting foreigners flocking to US

The dollar has taken a beating, but that makes America an attractive destination for foreigners looking for bargain vacations. It's a boon for the US tourist industry and travel-related jobs.

By Patrick WallContributor / July 15, 2011

Crossroads of the World: Tourists walk at Times Square in New York on April 8. In 1904, Longacre Square was renamed Times Square for the opening of the new headquarters of the New York Times newspaper in the Times Building, now called One Times Square and the site of the annual ball drop on New Year's Eve.

Liu Xin/Xinhua/Photoshot/Newscom/File

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New York

The truthful international traveler will acknowledge that of America’s many attractions – hamburgers, shopping malls, the Statute of Liberty – its cheap prices spurred by a weak dollar are among the most enticing.

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“We are thinking we are lucky to come here, because it’s so cheap now,” says Naoko Yamanaka, a visitor from Tokyo, before biting into a Big Mac in Times Square.

The dragging US economy of recent years has brought the value of the dollar down with it. That presents its own set of problems, but it has actually benefited the economy in at least one respect: Foreign travelers are lured to the US, where they can expect to get a bigger bang for their euro, franc, and yen.

“If the dollar’s down,” says Joel Naroff, president of Naroff Economic Advisors, “for those foreigners whose currency has gone up, that’s like getting an automatic discount on the price.”

The dollar hit 75 on the US Dollar Index Friday, nearing an all-time low of 70, says Kelly Loeffler on Intercontinental Exchange. While the dollar has rebounded slightly since hitting a three-year low in May, the faltering American economy and concerns about the US budget deficit continue to keep the greenback at historically low levels.

Meanwhile, several foreign countries have seen their dollar exchange rates improve in the past year. Currency from China, Brazil, Australia, Great Britain, Canada, and the European Union is worth more in the US this year than last, says Shane Norton, a director at IHS Global Insight, a forecasting and consulting firm in Lexington, Mass.

With the value of their currency up relative to the dollar, visitors from countries with favorable exchange rates are enjoying outlet-mall prices, says Mr. Norton. “You’re getting deals that you certainly haven’t seen in a while here.”

International travelers have caught wind of the bargains.

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