Hello.
The dollar - euro is now 1.31. Should we purchase euros now in the USA for a summer, 2011 trip, or would we get a better rate in Italy when we travel in the summer? Will Italian banks charge us for using their ATM machines?
Thank you!
Mrs. G

"The dollar - euro is now 1.31. Should we purchase euros now in the USA for a summer, 2011 trip, or would we get a better rate in Italy when we travel in the summer?"

Honestly if we knew the answer to that we'd be making killings on the money markets. Anyone who tells you any different is simply lying. Italian banks generally don't charge. Check with your bank regarding to see what your home bank is likely to charge.

Italian banks will not charge for the use of their ATMs. But your bank might charge a hefty fee; BofA charges a $5 flat fee for each withdrawal plus, I believe, a 3% conversion fee.

Do you really want to carry all the cash the conversion implies?

Are you sure that the Euro will rise? The crisis with Portugal's and Spain's finances has not yet hit its peak.

Even if the Euro rises, are you sure that it will be more than what you pay for converting the money in the States? Depending on your bank, withdrawing money from an ATM in Europe can cost nothing.

If you buy today, you will pay an overhead of at least 5% in order to get those euros in your hands. So you are already behind.

Next summer the euro might be $1.10 or $1.50. It might rain or the sun may shine.

Besides, in the grand scheme of things, the EURO a few pennies up or down vis-a-vis the Dollar is a minor expense or profit compared to airfares, etc.. ATM charges by your bank are pretty fixed. Are you a betting person? I would bet that the dollar will go down, long term. (Since June, it has changed from $1.23 = 1Euro to today's %1.34.) I would then pre-pay my rental car, hotel charges, train charges in US Dollars to the extent possible.

Go to your bank, buy 100 Euro before you go just to have some euros when you arrive and get settled. It usually takes a branch bank about 7 days to get the euros. Some banks have euros on hand if it's a larger bank. When to do this? It's up to you to decide. I always have some euros hidden away in anticipation of my next trip.

BTW - Assuming you have a debit card with 4 digit pin, inform your bank and credit card company when and where you will be in Italy just before you leave. Find out if your bank is associated with any Italian banks and use thier ATMs.

My bank doesn't charge me any conversion fees but I did pay a small service charge, $4 or $5. Just like I would here if I used a non-associated ATM.

There is no possible way to know the answer to your question. Usually buying at home is not a good deal because of the fees and poor exchange rates.

The fees for using an ATM in Italy come from your own HOME bank.