Exchange currency NOW - Good idea???
 

Wondering if I ought to exchange a lump of USD for Euro now, as opposed to wait until I get closet to the dates of my trip, in September. With the dollar's decline (and expected continued decline against the Euro), I am concerned that we'll not get as much stretch from our currency by then. We have a couple hotels that require cash only for payment - Would this be a good idea, or am I over-estimating the benefits of doing this advance?

Any opinions welcome.

Also, many thanks to those who recommended that I add a day to our itinerary in Rome - we've since done that, and I think this was a wise decision!

Katie.

Hi katie,

No.

See my response to your other post about cost of train tickets.

Why?
By August U.S. $1.00 will be 1.05 euro

Mama, will you sign a contract with me aggreeing to sell me euro for $5000 dollars at that rate in August? What's your address please?

Should you buy microsoft stock now figuring it will be worth more in September and you'll be able to sell it for a gain?

The answer is...nobody knows. Some say the dollar has bottomed out and that Euro financial ministers will have to cut interest rates as it is clear the US administration whether overtly or covertly wants a lower dollar. So the ball is in their court.

Me...I would just let what will be will be. If somebody tells you they know, they don't.

check with your bank to see how much it would charge to convert usd to euro. chances are good that fee would outweigh the benefit you MIGHT realize in exchange rate differences between now and sept.

Since the exchange rate you get stateside is not as good as what you'll get in Europe, you're not likely to save much or anything by changing the money now. If fact, you could be worse off!

If you are an investor that believes in buying high and selling low - then this might be the time to buy Euros.

Actually, I'm an investment advisor...who believes in mitigating downside risk wherever possible, and sadly, is also fairly bearish on the USD for at least the next 9 mos. - which is about the time I'll be honeymooning. But, thanks all for reminding me of the unfavorable conversion rate. Currency is not really my "bag" - and as I've admitted...I'm a definite amateur in the travel department. ;)

Katietwin -- I certainly wouldn't do this for the reasons already posted. But, no matter how positive you are that you will go in September, there are any number of things which could happen between now and then which could result in cancellation of your trip. If you purchase Euros now (at the inflated rate you will pay in the US) and end up not going, you would then have to change them back to USD at a probably really bad exchange rate (somehow, even if you did it the same day, the rate to change back to USD is probably a worse rate than the one to change to Euros) plus your bank could charge an extra fee for the conversion. In other words, you could lose much more on the two way conversion than you might save.

>Wondering if I ought to exchange a lump of USD for Euro now, as opposed to wait until I get closet to the dates of my trip,...<

Katie, you don't want to buy euro in the US at all, except for about $100 for your first day overseas.

Get euro from ATMs. That is the cheapest way.

Thanks again, all - done deal--- No euros until I get to Italy (except the first 100). :)

I'm not sure I would even get the first 100 euro in the U.S. There will be ATM's in the airport that will allow you to exchange currency. If you are afraid of using the ATM - then there should be some exchange places open in the airport that you could exchange US to Euros cheaper than doing it here. More convenient as well.

The currency exchange issue does not have to be a complicated one. Years ago, I would simply exit the plane in the arrival airport, go through passport control and customs, then head for an airport bank or exchange kiosk. I would then hand over a couple of traveler's checks to be exchanged. I was not worried about the exchange rate since I needed the money anyway, and I knew the rate would be better than anything in the U.S. The USD100 I would exchange would carry me until I could get to the large downtown banks with better rates. Nowadays, I simply insert a debit card into an ATM at the arrival airport and pull out a couple of hundred dollars worth of either pounds or euro. I know it'll be a competitive rate so I don't worry about it. In the rare event the ATM doesn't work, I simply head for the airport bank with my Visa credit card to get a small cash advance. Then I have enough until I can get to the city with plenty of ATMs. I have never obtained foreign currency here in the U.S. prior to departure. I just don't see the need to spend any time or money on the issue.

I've often though, as I bought a lottery ticket, that the ideal plan for a tourist contemplating visits to europe would be to wait until there is a favorable exchange rate, then open a euro-denominated account. Then, each time you go, use whichever account, dollars or euros, gives you more for your money. The idea, however, of removing money now from a (presumably) interest earning account to convert to euros (and stuff them in the mattress until the trip?) is one that would get my financial adviser canned.