kismetchimera

Yesterday when I went to the bank here in the US to buy some Euros for my trip, I had quite a surprise!!! 400 US dollars=325 Euros!!!
I remenber with fondness when the dollars was worth something... but c'Est La Vie...I will Survive!!

bob_brown

Get used to it. The expanding power of the euro is going to gain more momentum when more nations adopt it as a currency. The EU is expanding; so will the number of nations using the euro as their local currency.
The next major point of internatinal decline in the dollar will be when wholesale oil prices are denominated in euros rather than dollars.
When European economies get on the move again, there will be a further decline in the value of the dollar.

Scottee25

It is not so much the value of the Euro as it is the devaluation of the US dollar. The dollar is down on all fronts. A few years ago $1US would have netted you roughly $1.58Can. As of this morning, that same $1US will only net you roughly $1.31Can. Quite a drop.

PatrickLondon

On this side of the Atlantic, I can remember when the pound was worth 10 Deutschmark and US$2.40. But were we more wealthy (or healthy, or wise)? Hmm.

dgruzew

bob_brown,

you are inccorect in your evauluation of the US dollar. Currnecy markets do not work that way. Changing oil barrel prices to euros would not affect long term value of the dollar(but it would not happen anyway). even if you add the GDP off all euro countries(and those that are joining Euro!!) - it still des not add up to the US GDP. Look at the UK sterling(pounds) it is very strong currency, but not widespread. Several factors are at play in the sinking dollar:
1 -Low us interest rate( why invest in a currency that get .4 % interest )
2.- an administration that is pro-weak dollar. They belive a weak dollar will increase exports and decrease imports, thus increasing US jobs.This policy is already hurtng Japan and Europe(japan's central bank is actually BUYING US dollars to stop the fall,european exports are down 5-7% or somthing). And the strategy probably will work(in the short term - but HEY elections happen only once in 4 yrs), but soon after economic recovery watch for inflation to rear its ugly head. The dollar will then again soar, as interest rates climb.

dgruzew

Also Take in to fact that several of the worlds smaller economies such as Ecuador and (unoffically some parts of the former soviet union - but I imagine that may change with the Euro) us US dollars as currency. CHINA ties its currency directly to the dollar(which is currently very advantagous for them - because of their manufacturing sector) so 1 us dollar = 8.2870 chinese Yuan(always-never changes) . So in reality CHINA is on the US dollar.

smueller

It is also possible that EU expansion will weaken the Euro as more economically challenged regions are brought into the fold.

Currently, the biggest factor in the weakening of the dollar relative to the Euro (as well as the Yen, etc.) is that the federal government views the change favorably, believing that it will stimulate the economy, mainly through increased exports. A weak currency also decreases the risk of deflation, which Alan Greenspan has been concerned about for the past year or so.

Any stimulus to the US economy would likely be short term, because a weak dollar must inevitably discourage foreign investment, which has played a significant role in past economic booms.

My cousin, who is a financial analyst, believes that the dollar will eventually strengthen, but not in the near future. According to him, the reasons for the weak dollar are sound and that makes a sudden turnaround unlikely. In the long term, however, European financial leaders will begin to notice the impact of reduced exports and exert pressure to reduce the relative strength of the Euro. Also, the US may eventually want to strengthen the dollar to encourage investment.

I'm planning to spend much of October in France. I have simply resigned myself to the likelihood that the Euro is going to be a lot more expensive than last year.

Lewis

Hi all
I'm a treasury analyst with my company and have to agree with dgruzew and smueller. Kismet the rate today(now) is 0.847 which = $339. for your $400. The bank took 4% for a fee.
I think we will be in italy at the same time as you! Rome 27-30, Camogli 30-4, Chiusi 4-8 and Positano 8-12
Have a great trip. I know we will

HowardR

Commenting on the original post, I'm surprised no one has commented that you would have been much better off getting only $50-$100 worth of euro stateside to get you started, then going to an ATM when you arrived overseas.

kismetchimera

I know Howard, but I needed moneys for the limoservice and also my hubby(he will babysit our pets),felt more comfortable knowing that his precious wife, daughter and grandson, had some cash with them..

bob_brown

I did not say that changing the pricing basis for a barrel of oil would cause the decline of the dollar. I think most of us know that.


I cited it as another signal event in the decline of the dollar. Weak currencies are not usually used as a benchmark pricing tool. If we sell more overseas than we buy, the dollar will strengthen. But I have not seen anything yet that signals the reversal of the negative balance of trade that the US has run for the past umpteen years.

Christina

I just checked the paper yesterday and saw it was at 1.20 which did surprise me as I didn't think it would go over 1.17 or so (USD to buy 1 euro). However, I recently tried to get some from my bank in Maryland, as I noted elsewhere, and those crooks wanted a commission of about 12 pct over bank rate, so I think the 4 pct commission is pretty good, considering. I wouldn't have got that much myself, probably, but at least $200 worth, so it's not that much extra.

rex

The stock market is up a way lot more than the dollar is down - - measured as 30, 60, 90 or 120 days back.

Dick

Christina,

I'm in Maryland too. Today, I inquired at my bank and was told that they sell Euros at the rate of $1.27 each.

Since we are leaving next week, I don't have much choice.

dflawyer

Hope springs eternal. Check out:
http://www.forbes.com/markets/newswi...tr1002813.html

dflawyer

According to Forbes today, a downturn may be in the offing for the Euro.

dflawyer

Chase Bank is selling Euros to its customers for $1.2957, but I see the Euro is trading at $1.178? Where can I get a better rate if I want to buy Euros before I leave to Europe in mid-July?
p.s. http://www.dailyfx.com/
has up to date trading info.

Lewis

Hi dflawyer
You really can't get a better rate because the banks need to make money on the transaction! I gave a friend $100 USD and she came back from Italy with € 83.00 for me. If you can wait until you hit the airport ATM, you'll be better off. Have a good trip.

dflawyer

Thank you Lewis. I assume then that a withdrawal from my account from a ATM in Europe will provide me with a better rate than the bank will provide to me now directly?

dgruzew

Getting money from an ATM in europe is by far the best way to get money. I just got back and noticed that when I used my bankcard in the ATM I got a "average" rate of 1.18, but when I used the same card as a visa I got about 1.22. Currency exchange place are even worse