The U.S. Federal Reserve may start cutting interest rates before year’s end. That could make future trips abroad more expensive for the nation’s travelers. That’s due to how interest-rate policy affects the strength of the U.S. dollar. Here’s the basic idea: An environment of rising U.S. interest rates relative to those in other nations is generally “dollar positive,” said Jonathan Petersen, senior markets economist and foreign exchange specialist at Capital Economics. In other words, rising rates underpin a stronger U.S. dollar versus foreign currencies. Americans can buy more stuff with their money overseas. The opposite dynamic — falling interest rates — tends to be “dollar negative,” Petersen said. A weaker dollar means Americans can buy less abroad. Fed officials in June signaled they expect to cut rates once in 2024 and four additional times in 2025. “Our expectation for now is the dollar will come under more pressure next year,” Petersen said. However, that’s not necessarily…
