exchange rate for spring (dollar destined to drop)
 

Any ideas about buying euro ahead stateside even with the bad exchange rate. Or still take a minimum and take a chance with rates over there come march.

Without question, you will always get "the best" exchange rate if you use your ATM card "over there." ((b))

Hi jl,

You are engaging in what is known as "arbitrage". It is best left up to the arbitragers (arbitragists?).

If you want to hedge, take half the dollars you would spend for your trip in Europe and buy euro today.

I don't think any of us who travels and know how much the world dislikes Bush would be surprised if this doesn't happened.

Dear TW,

To put this as kindly and tactfully as I can, If you don't know what you are talking about, it is best to not say anything.

From 1992 to 2000, while the dollar was rising against the synthetic euro, it was sfallin against the Yen and Sterling.

The euro is still below what it was in 1993.

The valuations of currency are based on a lot more than who is President of the US.

It is really sad that a legitimate question on this board degenerates into political hostility. LET IT GO!! THE ELECTION IS OVER!!

To the question: nobody knows now what the exchange rate will be when you travel. Having a low dollar helps our economy by making US good less costly to purchase overseas. As our economy improves, my GUESS is that the value of the dollar will also go up.

--Marv

While a weak $$$ may not be good for your trip to Europe, it is good for the American ecomony. Makes our goods & services more affordable and will boost tourism (which Florida desperately needs from the past 4 hurricanes).

ECON 101. ((b))

No Budsman, it doesnt seem to work that way. The deficit is worse! Foreigners dont want to invest here and those countries dont want out products. So you theory is wrong.

Speaking as someone with a recent (2002) graduate degree in Finance and Accounting, ira and Budman are correct.

A weak dollar does indeed make foreign investment in US companies and products much more attractive.

And here pops up travelwoman again. The expert on everything except how to feel "safe" in Paris!

No Aggie, I think you must have been lasso-ing a steer that day and skipped class!

Travelwoman,

Highly unlikely. I graduated magna cum laude and a year early. One doesn't accomplish that by skipping class or misunderstanding major theories in their field of study.

In any case, believe what you will. It's certainly not worth a debate or degenerating into tossing out insults.

I do share your pain over the weak dollar as a fellow traveller :-( So there - we agree on something at least!

aggie,

yes but a falling dollar is symptomatic of the pullout of foreign investment in the US. not a precise analogy but like saying the falling stock market is good because it makes stocks more attractive to investors.

however, obviously it makes US manufactured goods more attractive for foreign importers. but of course the raw materials and parts are often bought overseas with weak dollars...

this is not a political defense but just pointing out that it is not correct that the weak dollar is good for everything except americans travelling abroad...much more complicated than that.

Magna cum laude, economics graduates, finance gurus, foreign trade experts, whiners from Florida...all here and absolutely loving each other and STILL can't agree on the "best" hotel in Paris...sigh!

NB: Econ. and business courses are taught by conservatives; it's a requirement.

The dollar will drop because a. the deficit is just going to keep on billowing; b. it's more important to our financial policymakers to make American goods cheap than to shore up the dollar; c. and therefore foreign investment is going to be withdrawn until it dawns on those same financial policymakers that we're in trouble. The prime rate will, at the same time, be allowed to rise to mitigate some of these processes.

Even so, within any given year there are smaller ups and downs within the larger overall trends such that for a given traveller with $100., the difference between now and March could go either way. Buy gold. ;-)

walkinaround,

Good point. I certainly did not mean to imply that "a weak dollar is good for Everything except americans travelling abroad". I agree that it is MUCH more complicated than that. I just did not see any point in posting parts of my 100 page thesis on international finance and accounting - it puts even me (the author) to sleep! ;-)

Sooooo sooooo sorry to upset everyone and did not have any idea this would spark such a reaction. Happy Holidays to all.

The last story I read in the Wall Street Journal indicated that $1.30 US per euro is here for a while longer. The experts think 6 to 9 months longer.

Texas Aggie, Is it true that our low interest rate is linked to the value of the dollar, and that as interest rates rise, the dollar will grow stronger? (from a former Texas Longhorn)

That is generally true. There are other factors but as interest rates rise there should be more demand for US dollars... more demand higher price.