Buy Euros Today?
 

The Euro may be at 1.40 to $ sometime this summer. Travellers concerned with currency exchange costs may be able to realize savings of 5 to 10% by buying now. Alternate idea, pre-pay any costs that you can with today's dollar.

That is a matter of total speculation and the fees to do it stateside vs. acquiring Euros from an ATM upon arrival can make it very inefficient to do that, too. Prepaying can make some sense, but it is also a matter of speculation on future value vs. the opportunity cost of prepaying.

The Euro may be at 1.20 to $ sometime this summer. Travellers not concerned with currency exchange costs may be able to immediately throw away 5 to 10% by buying now. Alternate idea, pre-pay any costs that you can with today's dollar and get locked out of any exchange rate improvement.

Pure speculation.

Gsteed: did you get this idea from the same place that told you (as posted on another thread) the "best bang for the buck" would be to exchange US$ for €, and to take 5 different credit cards?

And you know the € will be $1.40, exactly How?????

100 Euros will cost you $127.41 today. I remember the days when 100 Euros would cost $85.00.

Look on the bright side, it won't be long before it takes $2 to buy 1 Euro and we can leave the calculator at home.

If I knew what would happen with the dollar and euro, I would be a millionaire. Unless you are changing a lot (thousands) then the rate doesn't make that much difference.

Carolena

Gsteed is speculating, as any of us would be.

However, one can speculate intelligently and I suspect that he is closer to the mark at $1.40 than a guess than the Euro will be at $1.20.

If you're by nature a gambler then betting on a fall in the value of dollar makes some sense.

Credit cards, Debit cards and Travellers checks are all devices that minimise theft and loss. Direct conversion of one currency for another is a least expensive option. Obviously the least expensive is paying or buying with personal (US)currency. Know the daily exchange rate. Merchants are often acquiring dollars for US travel.

I'd be interested to know how much the fees are that your banks charge to sell you euros in the US?

<< Obviously the least expensive is paying or buying with personal (US)currency. >>

This is factually incorrect and down right bad advice. Electronic transfers (ATM, cc) enjoy a much better exchange rate than paper currency. There are costs associated with handling paper currency that are passed on to you - labor, storage, security, storefront rent, etc.

It will always (unless you have a bad US bank), cost you less $ NET to use ATM card for Euro than it will be to exchange paper currency.

Yes, it is ok to carry some $US paper money as a backup, but keep it in your purse and bring it home with you.

You'd be pretty safe in betting that the US$ will fall over time, but the timing is unclear. It depends when, and to what extent, China and other countries decide to scale back their funding of US debt.

The bottom line is that currency fluctuations are normal and nobody knows what the future holds...both the GBP and EUR have come down a bit in the last day or two against the USD...temporary? Who knows....there is rarely any sense in buying currency in advance...think of the interest you are losing and the extra fees you pay.

The usual advice holds namely to use the ATM to withdraw the small amount of cash you will need to supplement your use of credit cards everywhere they are taken for every purchase no matter how large or small. That way the exchange fees will be whatever they are and the banks will handle it...you can shop around to find credit cards and ATM cards that add on the fewest fees...the exchange rate will be whatever MC or visa sets it to be which is usually 1% above the interbank rate listed in the paper. Exchanging cash is always much much much more expensive.

As far as using USD, personally (and this is my own personal opinion) I find that it is insulting to the locals when you do this...Americans tend to think, due to the vastness of the country, that the only currency that exists is the USD and think that people are just only to happy to get dollars. Yes that might have been true years ago in the era of the Eastern Bloc and soft currencies and may still be true in some third world type countries but for the most part, people will not want USD (although I met some girl last year at a coffee shop in Florence who was crying because she had run out of euro and the shop would not take her USD despite what her bank had told her).

Now international airports are an exception...I know at LHR they take USD; at least most of the shops do (but at a very bad rate) but for the most part, while some should be held as a backup to be exchanged into local currency as a last resort, it is not really the right thing to do to expect merchants in Europe to take American currency (again my opinion).

"Merchants are often acquiring dollars for US travel."

... has obviously strayed into this thread from the "wilfully bad advice" thread.

Using ANY foreign currency in a hard-currency economy is roughly the same as taking your money and tearing it up into little pieces. Using a currency (like the USD) most people assume will depreciate still further is the same as taking LOTS of your money and tearing it up.

Merchants are merchants. They trade. Forex is a profit centre. Merchants who take foreign currency charge their customers more than the banks will. That's how they make money.

Actually, that's not quite right. They charge more than they think banks will in a day or two. So they rip you off even more if it's US dollars than if it's currencies they've more confidence in - like Swiss francs or Polish zloty.

Whether they're a major chain, franchisees of a major chain (like owners of petrol stations) or the handful of European merchants who have Florida houses (like London cab drivers).

Using foreign currency is easier in London or Paris than in New York. But it's still an act of pure charity to the merchants. And you'd feel a lot better putting the money in your church poor box than handing it over to the Phoney Pharaoh who runs Horrids.