Central Europe Exchange Rates
 

We know that the UK is a relative bargain right now. How's the exchange rate (against the dollar) in the non-Euro parts of Central Europe? Hungary, Czech Republic, Poland?

This will give you a better idea of what the fx rate looks like, in historical context:

http://www.oanda.com/convert/fxhistory

The short answer is that the dollar has gained considerable strength against all of the major European currencies, but the gains against Sterling have been especially dramatic.

Thanks. All really have gained strength. We're planning a trip this year and are considering UK and Central Europe (again).

I'm not sure where this simple number gets you.

A number of countries in the wide region - like Ukraine and Moldova - have devalued spectacularly against the USD, but their inflation hasn't declined, so - depending which prices matter to you and how official numbers reflect reality on the ground - many visitors might actually find those countries worse value for money.

Of the larger and relatively tourist friendly ex-communist countries, Romania has also devalued substantially.

Whether that'll remain the case in 6 months' time, who on earth knows. The only lesson of the crisis so far is that any previous six months are a really, really useless guide to the next six, especially when it comes to currency rates.

Choose where you want to go, then assume a 30% adverse currency movement, is the only prudent basis for travelling decisions.

A few months ago the USD bought 2 Polish zlotych, today you can get 3!

<i>I'm not sure where this simple number gets you.</i>

The simple number doesn't get you anywhere. But, taken in historical context, it can give you an idea of whether now is a good time to visit.

If we assume that inflation in local currency (for tourist expenditures) is relatively consistent across countries, then you would want to visit a country when the fx rate is relatively favorable. For example, the USD is now worth roughly 35% more GBP than the average over the past 12 months. It is only up 15% over the Euro. Unless you are like logos and assume that the GBP is headed for inexorable decline, then I would say that a visit to London now offers more &quot;relative&quot; value than a visit to Paris.

A few caveats:

1) Of course, this works best when comparing relatively stable tourist markets (France vs the UK), for example, but I think places like Prague and Budapest long ago ceased to be so cheap that inflation should be expected to be abnormally high.

2) This thinking works best when you plan to go to both destinations at some point - if you choose London over Paris this year, you will have the opportunity to choose Paris in the future.

3) That you are making near-term decisions. Your admonition to assume currency shifts is good advice, but if you are deciding between two places for a trip a couple of weeks away, then I would still consider the fx impact.

Bearing all of that in mind, I feel that the UK offers a lot of relative value for both Europeans and Americans, right now. I don't think Sterling will be this cheap forever, and you have the added bonus of depressed demand for hotels, particularly in London, further decreasing your costs.

Traveling in Prague and Budapest this past fall, I noticed that most if not all prices were pegged to the Euro. Our vacations were about as expensive as in any other major city. I know the dollar is doing better against the Euro than it used to be, so that works for you.

Not sure about Poland. If you go to the EU website you can see which member countries are on the Euro, which are transitioning to the Euro (and thus have pegged currencies), and which have floating currencies. I'm not an expert, so someone correct me if I'm wrong.