Early this year, I managed to escape to the Big Apple and spent all my hard earned cash on designer goodies at almost half price. At $2 to the £1 going shopping felt like a trip to the sales! And I was indeed 'having a nice day'.

Alas, that perk is disappearing fast as the value of our Sterling tumbles - actually plummets - to new lows. On Black Wednesday it was pegged at $1.50 to the £1, effectively making that trendy bag in Bloomingdales 25 per cent dearer. Today it dropped again to a new low of $1.39 to the £. This doesn't just affect stays in the US but also several destinations whose currencies are pegged to the dollar such as some Caribbean, African and some Middle eastern countries.

To make matters worse, the euro has also been chipping away at the pound. Last year the cost of a euro cost just 60p so you could frolic in France and come back with a car boot full of boozy bargains. However, this year, that same euro costs almost pound today adding 30 per cent to the cost of this trip.

As the US and the EU are now no-go zones (currency-wise), savvy travellers should look elsewhere for a relaxing escape. Long haul travellers should turn left instead of right and head down under where the Ozzie dollar is still $2 to the £ or New Zealand where the pound has stayed level. Or if you've always had a hankering for an African safari, go now and enjoy some sunny weather and an extra 19 per cent more rands to spend on an upgrade on your lodge.

You may have noticed that Iceland's credit is very crunched at the moment, which for Iceland and its banks is bad news. But this is tremendously good news for travellers who have been put off by the high cost of living there. Last year the £ bought you 124.7 Icelandic Krona and today you get 193.2 Krona. That's a whopping 55 per cent more dosh. To put that into perspective, holiday-makers can now enjoy a three-course meal at a reasonable £35.00 as opposed to almost £60 for the same dinner last year. Plus foreign shoppers are entitled to a refund of 15 per cent VAT on their purchases. To drum up tourism, the cost of travel to Iceland has been tagged lower this year, so there has never been a better time to go see the Northern Lights or be wowed by a geyser.

South Korea is emerging as a new hot spot hoping to gain prosperity through tourism. Its currency has fallen by 25 per cent so holiday-makers may just be tempted. Those with a yen for Japan should note that although in the same vicinity as South Korea, its currency offers 28 per cent less value then it did last year.

Holiday bookings to cultural hot spots like Peru, India, Thailand and Egypt have risen dramatically in recent months and no wonder. In these countries the cost of living is so low that that goods and services are are cheap enough to make currency fluctuations irrelevant.

Finally, its worth noting that Middle Eastern countries like Dubai and Abu Dhabi, who for so long have been attracting tourists with the promise of cheaper 'duty free' shopping, can no longer deliver. Their Dhiram is pegged to the Dollar, so don't expect any bargains there!

Top Pound Stretching Tips For the Savvy Traveller

- Don't pay peak time prices - opt for off-season, off-peak travel instead

- Book your package holiday or air travel well in advance

- Buy your currency well in advance and avoid exchanging at airports.

14 December 2008