Euro vs dollar
 

How come no one has posted that "the dollar is rising vs the euro and the pound, so I'm going to Europe"?

It's certainly better. Will it last? I'm going to London this summer and that would be great for us.

It can't go up fast enough as I'll be there in 13 days!!!

Get out ! Is it ?

Numbers please

piffle.
The dollar has gained about 3% in the last couple of weeks.
Compared to its value when the Euro first came out, the dollar has dropped 38%, using today's price of $1.22 per 1 euro. That is not exactly a figure to cause a stampede.

You don't really expect the euro to weaken versus the dollar until our balance of payments becomes less negative do you?
And our national debt drops under the mega trillion mark? Take a look at fiscal reality.

Today, 1 Euro = $1.219

A few weeks ago it was $1.28. Hope this is a positive trend.

barbmike, we are leaving in 12 days for Italy. Can't wait!

>Compared to its value when the Euro first came out, the dollar has dropped 38%,...<

Sorry, Bob, the euro was originally priced at $1.18. That's only a 3% rise.

I think you are comparing it to when the euro had dropped to $0.87.

Lorac1127, what's your Italy itinerary? I'll be in Italy from March 30-April 12th. My first stop is Switzerland for 5 nights in Wengen. Mike

Hi

Confucious say " Never travel with a third world currency !"

Peter

I was just at a speech this morning for the chief economist from the Fannie Mae mortgage group (so take it for what it's worth) but he said that those in the know believe that the dollar will not likely drop any further against the Euro, with the exception of minor fluctuations. He also said that this drop was "long overdue" as the Euro has been undervalued since its inception.

> He also said that this drop was "long overdue" as the Euro has been undervalued since its inception.<

So much for 'experts'. The reason the euro plummeted almost immediately after it's inception was that it was overvalued compared to the national currencies on which it was based.

For example, 2000 Lira were worth less than $1 and 6 FF equalled a dollar in 2001. The euro was set at about 2000 lire and 5 FF and set at $1.18.

It was grossly overvalued.

Not to mention that everybody raised their prices when they switched over.

You call this rising?

This week I had to use Paypal to purchase something by credit card in England and the conversion was $1.87 to 1 pound.

Keith

barbmike, we leave on 3/24 for Naples, then to Montalcino on 3/29 and then on to Venice on 4/3.

Ira,
I believe he meant undervalued in comparison to the dollar, not compared to the currencies it replaced.

swalter, I suggest you quit while you're behind. your lack of knowledge in economics is astounding. it was just explained to you that it was overvalued to the dollar, don't you get it?

I enjoy looking @ www.xe.com frequently for the exchange rate. It has been nice to see the exchange rate improve for the dollar over the last few weeks.

Picking up on an earlier comment, the European currencies underlying the Euro have fixed values compared to the Euro. For example, 1 Euro always equals (rounded) 6.56 French Francs. While that might seem like just a curiousity, it makes it possible to compare relative costs and exchange rates over different periods of time that are both prior to and following the introduction of the Euro. (And as we've often said here before, it's been "better" and it's been "worse", from the perspective of the exchange rate to U.S. dollars.)

OOPs

I erred on the value of the FF.

In Dec. 2001 the conversion rate was 7.36 FF = $1.

The FF was then set at 6.56 to the Euro, with the Euro set at $1.18.

Thus the FF went from 13.6 to 18 cents. The Euro would have to be priced at $0.89 to keep the FF at the price it had been before the conversion.

At the same time the Italian Lira was 2194 to the dollar. It was changed to 1936 = $1.18, a 33% increase.

An article in todays The Incredible Shrinking Dollar will make you quite sad!

http://www.nytimes.com/2004/03/14/travel/14euro.html

The exchange rate of the Euro against participating currencies was set irrevocably on Jan 1, 1999. You can bet the finance ministers made sure no country gained an advantage.

1 Euro equaled 6.55975 Francs equaled 1936.27 Lira equaled 1.95583 Marks

6.55975 Francs at $0.178 dollars per Franc equals $1.1676
1936.27 Lira at $.0006029 dollars per Lira equals $1.1674
1.95583 Marks at $0.5969 dollars per Mark equals $1.1674

The value of the Euro on Jan 1, 1999 - $1.1674.

The numbers above are from http://oanda.com/

The following is from:
http://europa.eu.int/comm/economy_fi...urrency_en.htm

-----------
Origins of the euro: Final stage of EMU - birth of the euro

1 JANUARY 1999 Birth of the euro
The euro became the new currency for eleven Member States and a single monetary policy was introduced under the authority of the ECB, heralding the third and final stage of monetary union.

LEGALLY, THE PARTICIPATING NATIONAL CURRENCIES HAD CEASED TO EXIST and became ?non-decimal sub-divisions? of the euro.

Euro area financial markets switched to the euro, including foreign exchange, share and bond markets. New euro area government debt was exclusively issued in euro as from that day.
--------------

The Euro dropped against the dollar because of economic reasons not because the the exchange rates were set incorrectly. The US stock market was booming, the US economy was stronger than Europe's and 2 year US Treasuries in 1999 were yielding more than 6%. The US dollar was a very attractive currency.

The Euro continued its decline until October 2000. Trading stayed in a narrow range until April 2002 when the Euro moved above $0.90 and began the extended move to $1.29 in February.

Suggestion: Quit worrying about currency conversion rates! Their are no ways that you can change them. Too much? Don't go. If costs are a concern...change hotels..eat less, buy nothing. Europe is still a great place to be! USA, Marriott or Travel Lodge? Best,least cost an Indian owned an operated motel.

yesterday it cost $200.60 US to buy $150.00 Euros at phila. airport......banks, hotels and American Express all have different rates in Italy...they will quote you their "tourist rates" and then their fees...I'm sure they're remembering when $1.00 US was worth 2,250 lira and we got a lot more bang for our buck...

popesa, I figured you paid $1.33 for one Euro.

If you would have used your ATM card at the airport in Europe, you would have gotten one Euro for about $1.23. ((b))

I just wish it would settle at 1 to 1, then we wouldn't have to overwork our brains when we're on vacation.

I've had one atm card chewed up in italy...no thanks

also, we have a VERY short stop in paris and then on to Marco Polo a/p where we will be arriving in the morning.....so after baggage claim and customs we'd like to get right on a bus into Venice and be done with it...whatever works.....also, how can you be sure what the price of Euros will be next week, anyway ?

You said:
"I've had one atm card chewed up in italy...no thanks"

Does that mean if you have a delayed flight you never fly that airline again? Or if you got in a wreck, you'll never drive a car again? Or if you arrived at a hotel you booked online and they didn't have your reservation, you'd never book a hotel on line again? The odds of an ATM chewing up your card are extremely minor. Do you travel alone? You should always have one backup card with you. I guess it's fine if you don't mind paying an extra 10% for your entire trip to go ahead and exchange money. I'd personally rather put that extra money to better use. .

popesa, it all boils down to "what makes one feel comfortable."

Push comes to shove and the airport ATM is out of order, I found that most taxi drivers/companies accept credit cards. If for some reason they don't, I'm sure you could negotiate with one to stop at an ATM machine on the way to your hotel.

Bottom line -- I never get Euros in the States. For my upcoming trip ti Ireland, I have about 10-12 Euros left over from a previous trip, and that will be sufficient for me until I get to Ireland. ((b))

I think on your very first trip you get euros in advance, enough to get you from the airport to the hotel. It gives you peace of mind and less hassle when you are jet lagged and negotiating a new country for the first time.

Then be sure to come home with 50-100 euros and you'll never have to pay the exorbitant rates in the US again.

For the record my comment above was not meant to say getting a hundred or 150 euro before you go, even if it costs you an extra $15 is a bad thing at all. I agree that if it gives you peace of mind, then the $15 is well spent. However, Popesa seems to indicate that's how he'd get all his euro on a trip, always exchanging dollars for euro and not caring if it costs him an extra 10% each time. To me that's either for the very wealthy or the very careless.

Best Euro vs. dollar exchange rate in months (1 euro = $1.18) !

I leave it 8 weeks -- hope it holds! (not that anything could stop my excitement about this trip)

Two little kittens sitting on a fence, trying to make a quarter out of 15 cents.

~trying to make 2EURO out of 15 cents.

PEOPLE, look at the big picture! Let's say you spend $2,000 US on your trip. At 1.20 to the dollar, you'll get 1,666.66 Euro. At 1.18, you'll get 1,695.

You know what that extra 28 Euro cost you? A big drop in your 401K if you have bonds in it, higher interest rates in the coming months on your credit cards, higher mortgage rates if you have an adjustable rate or are looking to move, and potentially a higher cost of living as the dollar is rising versus the Euro because of an expectation of inflation in the US.

So enjoy that extra 28 Euro!