The Australian dollar is gaining more strength against the Euro as Aussie travellers are poised to enjoy a much promising European holiday season as the local currency may be better positioned to buy beyond 75 euro cents very soon.

Though analysts are cautioning that the Australian dollar's strong performance may be cut short once Europe plunges deeper into a recession, Flight Centre spokesman Haydn Long is upbeat that travel prospects offer fantastic value now.

He said that the trend may not dictate on people where to go "but it does tend to influence what they do when they get there," as he noted that airfares are actually pricier compared to the value 12 months before but they are cheaper still than two years ago.

The local currency has gained further momentum since the release of the sovereign debt rescue package for Europe and foreign exchange experts are predicting that more gains can be expected as the Aussie dollar increased its value by more than 30 percent against the Euro since October 2008.

Commonwealth Bank currency specialist Joe Capurso said that the Euro could only take the downward path at this point, in spite of the package rescue scheme as he stressed that "the sovereign debt crisis means austerity measures, which that means recession and that means a weak euro and it is inevitable that there might be a bit more upside to the Aussie/Euro."

He conceded that the loan package may have averted the scenario of debt defaults within the eurozone but investors are still wary that troubled countries such as Greece, Spain and Ireland would remain susceptible to financial woes.

Mr Capurso said that these nations will be forced to raise more taxes and institute deep spending cuts which should nudge them into deep recessions for a number of years while eurozone's bigger economies may be affected a bit."

He said that the bigger countries are bound to make painful adjustments too "but on a much smaller scale, so the risks that Europe as a whole has another recession, even though they've just got out of one, are going to push the euro lower."

Mr Capurso is upbeat that the Australian dollar is better positioned against the Euro with a stable balance for the local currency "once the situation in Europe deteriorates to the extent that they have another deep recession, then that will cut back the view on the world economy and that will bring down the Aussie against a whole bunch of currencies."

Macquarie Group strategist Rory Robertson lauded the European Central Bank (ECB) and the European Union for ensuring that no eurozone governments would default on their loans but he agreed that the continent's economy is going nowhere fast.

He said that "with interest rates close to zero, the main unused avenue so far is for the euro to continue to decline but that boils down to the main unused avenue for growth."

And Nomura Australia economist Stephen Roberts can only affirm that the European economies currently saddled with debt problems "are poised to enter a 'prolonged period of difficult economic conditions' amidst a very strong possibility that the Australian dollar would appreciate further against the euro over the next few months."