seeksocean

I have booked a trip to Europe in May for three weeks. I have my lodging in place and have chosen the lodging based on somewhat of a budget. Because it won't be until May that I actually get charged for my rooms, I am wondering what people's thoughts are about the Euro getting stronger or weaker in the next 8 months or so?

I know it's somewhat ridiculous, but if popular theory is that the Euro is just getting stronger, then I may want to just buy a bunch of Euros and just sit on them until my trip. At least that way I know what I am paying for the rooms.

What do you think out there in Fodorland? Be nice!! Thanks!

suze

If I could answer a question like this correctly I would have already made a killing in the stock market... is what I think

PalenqueBob

Ditto to Suze's comment. I've been tracking European currencies vs dollar for years as i've had business interests in Europe and forecasts may or may not pan out - often seems to defie all odds - this is hard to bet on and anyway the amount that it may change is often quite negligible in terms of real expenses - a 5% swing would be unusual i believe even. Rather than buying euros i'd try to trim trip costs by getting great airfare, hotel steals, etc.

buongiorno

Likewise, you need to consider that money has a time value and buying cash and having sit idle makes almost no sense. If you liquidate savings to buy Euros, there's an opportunity cost that you may not recoup with fluctuations.

francophile03

It's like airfare. No one knows if/when the euro will go up or down. You may as well prepare for it going up to be on the safe side.

suze

As already mentioned above, I would control my budget by staying at one lesser hotel, or keeping my food budget low a few meals. That can easily off-set whatever small change happens with the euro in less than 1 year's time.

mikemo

I made a ton betting on the MXN peso vs the USD, but I might just have easily been hammered.
Currency speculation is no place for most of us.
M

Edward2005

For all practical purposes currency fluctuations are random. While there are non-random things that affect them (like surprise changes from the Federal Reserve), we don't know what these changes will be or when they will happen. The euro is just as likely to be below $1.22 in May as it is likely to be above it.

I never worry about currency fluctuations as affecting the cost of my trip. The gyrations will tend to offset each other over the long run. Some years the dollar will be strong and sometimes it will be weak. Besides, who the heck wants something else to worry about?

Powell

I completely agree with Edward2005. Currency traders do not know where rates will be tomorrow. They make very educated guesses, however, but the further you go out in time the more uncertainty that there is. They also hedge their "bets". The amateur sust cannot mirror this skill.

Over the years I have bought the Euro from 80 cents to $1.35, so it has averaged out.

I met a person in France who opened a savings account in Euros in Provence. She uses that as a hedge against a rising Euro. But remember the exchange rate varies both ways.

Incidentally, we usually come home from a trip with 250 euros or so and have some fun watching the variation over the next year. In real terms we have dealt with 25 or 30 euros variation.

seeksocean

Thank for all the great responses!!! I guess I'll just hang tight and hope that the Euro hangs in there or gets weaker. I also did get my airfare for the price of the taxes only because I used miles and booked far enough ahead so that my flights are non-stop.

However, As time goes by I might want to get a few Euro before the trip. If I decide to do that stateside, what is the best way/place to go about doing that. Thanks again for not making me look too silly for asking my questions.

swalter518

We've found that the best place to get Euros here is at the main branch of a "big" bank, i.e. the main Chicago Bank One branch. You can get them at branch offices but it usually takes a few days for them to get them. You may want to call around to banks for the best exchange rate too.

tower

Unsolicited advice for anyone worrying about the fluctuation of dollar vs. foreign currencies:

If you love travel, nothing like this really matters....we travelers all have different budgets.... steal a little from your dining budget and put it into your lodgings, and vice versa...in a year or so after your trip, you won't even remember what you lost or gained...and you'll be happy planning your next one. Happy Travels!!
Stu.

Robespierre

It's a fair bet that you will be able to either withdraw Euros from an airport ATM when you arrive, or at least get to a bank ATM by using your debit card for transportation into town.

In any case, exchanging currency in the US will be a waste of money. Carry some USD to buy a little local at a Bureau de Change in case neither of the above is possible.

Nail down as many of yours costs as far in advance as possible. If you don't, and the Euro strengthens significantly against USD, it could knock your plans into a cocked hat.

suze

You can purchase euro in the U.S. from major banks (I'd start with your own), online, AAA, Thomas Cooke, etc. You can most likelyo buy them at your departure airport. I believe all of these incurr some fees and not the best exchange rate. But that's how you'd do it if you want something in your pocket before your plane lands.

seeksocean

Thank you so much!

winesipper

I checked out several banks before making a recent trip and the cost of buying Euros is outrageous. If the Euro was 1.22 you would pay 1.28-30 and that is assuming you had a "private banking relationship." Forget that and take a debit card with you and go to the first ATM and withdraw sums. I have found that the governing bank will put a max on the sum you can withdraw on a daily basis but just go back the next day and hit it again. The exchange rate this way is 3/4 of 1% or about one and a half cent per dollar based on what I have experienced. If I'm getting ripped off some other way I don't know it and rather not know but I think I have this right. Using MC or Visa is another rip.

As to hedging your position for the total cost of the trip, like others have said it is like rolling the dice in the currency market. If you plan to spend $10k or more you might want to consider EverBank based in Jacksonville, Fla. They deal in all the worlds currency. So you can buy a $10k CD in Euro's for one year, as an example, and receive 1% interest. No big deal but at least it is something. The maturities are 3-6-9-12 months etc and the interest varies depending on the maturity. You pay a "dollar to euro conversion fee of 3/4 of 1% in and out".

All the best, TB

Ronda

I looked into my crystal ball dhis morning and it said de dollar is going to get stronger and stronger and stronger. Don't buy euros now. Berry bad move. My crystal ball also said that Iraq will soon be a highly sought after tourist destination.

Robespierre

<i>p.s.</i> You don't need Euros in your pocket before the plane lands. The cost of all the food and drink is included in the airfare.

If you absolutely, positively need a few &euro; to get to an ATM, you can always change a few bucks at a BdC. There is simply no upside to changing money you don't have to.

USNR

What's the Euro going to do? There is only one correct answer we can give you now. It will fluctuate.

But, as a retired investment banker, I have to say that I suspect Sunday's national elections in Germany will play a key part in the months and years ahead.

Germany, as one person put it, never loses an opportunity to lose an opportunity. It suffers from its own prosperity and its unwillingness to see that it, like all other nations, is now part of a global economy.

The German voter does not want to do anything that rocks the boat. That is, if he/she is employed, enjoys Germany's practice of granting seven weeks of vacation, and wants to continue a government that refuses to get its national head out of the sand.

As Europe's economic powerhouse, Germany should be a leader. America needs shared leadership, starting with Germany and with all of Europe. And, given Germany's obdurate attitudes toward economic reform within its own borders, I suspect that the Euro is in for an extended period of weakening against other, more dynamic economies.

parisnow

I agree with Robes..The best exchange rate you will get is through an ATM machine while there and probably no commission from your bank. If you exchange with a bank or BDC now the commission alone will probably not make it worth your while if the Euro increases. It has taken the Euro about 7 years to raise approximately 30 cents. The worst exchange rate and highest commission I ever had was exchanging money here in the US before I left.