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A way to consider the dollar/euro exchange rate

A way to consider the dollar/euro exchange rate

Sep 24th, 2007, 09:42 AM
Join Date: Jun 2006
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OK, NOW I get it!! Sorry that I'm so slow (although I notice nobody complains about the speed when they want something, especially money).

Thanks, Dave.
Dukey is offline  
Sep 24th, 2007, 09:50 AM
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I will be in Europe for two weeks. I am going to think for two weeks when I spend a euro, like I am spending a US dollar and just enjoy myself on the trip i so much look foward to.
mike_b12 is offline  
Sep 24th, 2007, 09:52 AM
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Am I missing something. For every $100 us dollar spent just think of it like a BK meal? Well I just booked a hotel at 346E (Euro) and it translates to $487 US dollars, that's a difference of $141. By your calculations it should have cost me only $27 or $28, so what's with that?
molly4669 is offline  
Sep 24th, 2007, 09:55 AM
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And yet I agree with the last poster, I'm not going to cringe at every purchase, but somehow it makes me feel like I did at Disney with my kids...splurging was hard on the pocket!
molly4669 is offline  
Sep 24th, 2007, 09:57 AM
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I think we have a tipping point issue here. When you go out and spend 100 Euro for dinner, you are already spending the equivalent to a tank of gas to get there. At what point do Americans say "I'll stay home and have my European friends come visit me and take me out to dinner". lol
altajoe is offline  
Sep 24th, 2007, 10:11 AM
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I have to disagree with juju on airline fares. Perhaps if you live in NY, Boston or Chicago, airline fares are still farely reasonable, but I was able to regularly find fares to Ireland in May for $500 or less from my area. Never would I have to pay over $600. That all changed with the oil issue. Currently fares to Dublin from my home are at $923. For two people that is a substantial hike. If you had a family, even worse. Certainly more than a tank of gas in my Honda Civic.

I agree that prices in Ireland have shot up. Prior to the move from the Punt to the Euro you could find very nice B&Bs for 19 IP. Within a year after the change, the bulk of them were E28-30 (24 would have been the exchange) and they kept going up. That said, an Irish B&B is still one of the great lodging deals. A great room with a view of the Atlantic ocean and a huge breakfast for about $100 a night for 2 is something you won't find in the States. Food has risen quite a bit too

Since April of 02 (as far back as the tool I used would let me go and about the time Ireland converted) the exchange rate has gone from a low of .87 to a high of 1.41 which is about a 61 % increase. That's not a trivial increase over 5 years. In 2002 I got a plane ticket RT to Dublin for $450 (ok, that was a deal) now $923. That's a 48% increase, again not trivial.

If you compare last year to this year, the increase is not that great over 5 years it has been. The argument will certainly arise that the exchange rate was "supposed to be" about 1.16 which is fine. So we got a deal for a year or two. But if you are just considering was/is, there has been a big change.

wojazz3 is offline  
Sep 24th, 2007, 10:12 AM
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Hi D,

Another way to consider the xchange rae is to note that E is up about 11% from this time last year.

Airfares are up over 25% due to the cost of fuel.
ira is offline  
Sep 24th, 2007, 10:15 AM
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Ok folks, let me try this again. I'm talking about the DIFFERENCE in the value of the Dollar vs. the Euro from last year to this, not what something actually costs.

The DIFFERENCE in the Exchange Rate is 5 cents per euro (1.35 dollars to 1.00 euros in December of 2006 vs. 1.40 dollars to 1.00 euro in September of 2007).


daveesl is offline  
Sep 24th, 2007, 10:28 AM
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I completely understand, daveesl, but you also have to understand that even a small margin of difference is enough to keep some people away, no matter how much you try to minimize it. Exchange rates are psychological as well as physical.
kerouac is online now  
Sep 24th, 2007, 10:44 AM
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I've seen it reported that the recent half-point Fed move has caused the spike in the exchange rate. Thanks to the Fed, I'll be saving on my HELOC.
TuckH is offline  
Sep 24th, 2007, 10:58 AM
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Here's my 0.0141978 EUR:

Because the Euro is so strong against the dollar, it's getting more expensive for US citizens to travel to destinations within the US that are popular with Europeans.

Have you looked at hotel rates in New York, San Francisco, or Los Angeles lately? They've gone up at a rate much higher than inflation. And I'm not just talking about peak travel periods.

I don't plan to stop traveling to Europe, but I've cut way back on hotel stays in New York.
zooey91 is offline  
Sep 24th, 2007, 11:01 AM
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Its the Republicans stupid! Our USA dollar is now worth a great deal less than when Bill Clinton left office. I'm betting that Mrs. Clinton will add value to our dollar. European hotel rates are outrageous but Americans continue to pay them. The hotel manager says, "We didn't raise them high enough, lets add another 100 Euros!". bThis is also from Econ 101. Elastic Limits.
GSteed is offline  
Sep 24th, 2007, 11:18 AM
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We've solved the Euro problem, we'll just vacation in North America. h. clinton will soon provide us all with free health insurance and car insurance.
Pago is offline  
Sep 24th, 2007, 11:21 AM
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Lots of interesting thoughts here. Woojaz3 - good point, I am in Chicago and you can often find deals to Ireland - thank you for reminding me that it is all a matter of where you begin!

I think that kerouac put it best - exchange rates do have a psychological effect! I think no matter how much money we may have to spend on travel, we want to feel that you have a good value for our money. Perhaps as the Euro rises against the dollar, I sense that our family travel budget would have greater value elsewhere.
With that said, there will come a time, when my kids are a bit older, that I will take them to experience Europe, regardless of the exchange rates..and I'm hoping it's better...
jujubean is offline  
Sep 24th, 2007, 11:34 AM
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"exchange rates do have a psychological effect!"

Absolutely, I still remember back a few years ago when a dollar would buy you 2000 Italian lira, many people said their dollars went so much further in Italy than anywhere because they got so many lira for a dollar. Never mind if things cost the same as other countries after conversion, people just liked getting a lot of "their" currency for a few of "ours". And just as many people didn't worry about the thousands of lira things cost in Italy because they were focusing on how many lira they got for their dollar, today those same people don't focus on how many euros things cost, but rather focus on how few euros they get for their dollars.

There is still some illogical belief that a dollar and a euro should be interchangeable, and many people really can't see beyond how many fewer euros they're getting for their dollars. Never mind if some things still cost less in Europe than at home -- people are hung up on how many of "theirs" they get for "ours".
NeoPatrick is online now  
Sep 24th, 2007, 11:37 AM
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We haven't been able to travel to Europe for three years.

So, the difference between 1.15 or so and 1.40 really does make a difference when we plan hotel rooms.

I just hope that the downward spiral slows down because we cannot go until next May.
Sher is offline  
Sep 24th, 2007, 11:54 AM
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So true! NeoPatrick, your comment about Lira is so true. On my first trip to Italy - at the age of 19 - I thought it was great..all that money - thousands of Lira - I'm rich! Interestingly, I just came across an old box from college and what did I find - Lira. Hhmmm... I don't feel so rich now.
For me, it isn't that the dollar and other currency should be equal. No, for me it is just that we have so many demands for our dollars that I like to stretch them as best I can when traveling. For years, we went to see good theatre at Stratford in Canada because the exchange rate was so good on the US dollar - we could spend with relative abandon and still "feel" like we were getting a good deal - and we were. We saw fantastic plays for a fraction of the cost of New York - and the travel costs were fairly low for us. Things that would generally be out of range due to expense were now in range because the exchange rate was so good.
As the exchange rate declines, it makes us rethink our travel plans and what we can afford to do.
jujubean is offline  
Sep 26th, 2007, 01:45 PM
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Well I just booked a hotel at 346E (Euro) and it translates to $487 US dollars, that's a difference of $141.
In Iran (just an example) 487 US dollars translates to 4,620,559 Iranian Rials. That's a difference of $4,620,072 right?
Askar is offline  
Sep 26th, 2007, 02:01 PM
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Canada and US are at par, yet a recent study shows that things in general cost %24 more...but,but..it's at par. Doesn't mean anyhing.

What drives me even more nuts is when people say "it used to be Europe on $5 a day" or "$25 a day" ...means nothing...what were wages then? You can't compare then and now...unless you factor in inflation, better standards of living,etc...
Michel_Paris is offline  
Sep 26th, 2007, 02:06 PM
Join Date: Jun 2007
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My husband said it best when we were in Europe this past April:

"I'm having so much more fun since I stopped thinking about the money!"
connecticutyankee is offline  

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