Exchanging currency here or there?
 

Hello,
I leave in 3 days for my Italy journey and would like some ideas on whether to exchange money now or wait until I get to Italy. I have been watching the dollar slowly go down against the Euro. I almost went and purchased a couple thousand Euro's two weeks ago at 94.2 and now it is at 86.509.. S.O.S.

FRANKFURT, Germany -- The euro rose above $1.16 to a four-year peak Monday as comments by U.S. Treasury Secretary John Snow helped propel the 12-nation European currency closer to its all-time high.

The euro hit $1.1621 in morning trading in Europe, the highest since Jan. 22, 1999, when it was $1.1624. In later trading, it fell below $1.16.

"When the dollar is at a lower level, it helps exports, and I think exports are getting stronger as a result," Snow said Sunday on U.S. television.

The euro is now about three U.S. cents away from its all-time intraday high of $1.1884, reached on Jan. 4, 1999 just three days after it was launched on financial markets.

Its highest daily average, as represented by the European Central Bank's reference rate used as a benchmark for trade contracts and other transactions, is $1.1789, reached on the same day.

Currency analyst Alexandra Bechtel at Commerzbank said Snow's comments indicate U.S. authorities won't intervene to stop the dollar's slide, and comes after remarks by European Central Bank head Wim Duisenberg last week that he also welcomed a stronger euro.

"Until the euro surpasses the rate at which it was introduced, there can be no question of intervention," she said.

The euro's 15-month rise has been driven by investor doubts about the U.S. economy and financial markets. As investors move money out of U.S. assets, they must sell dollars, driving down the exchange rate.

Other factors, economists say, included higher interest rates in Europe. That draws cash from the U.S., where rates are the lowest in four decades.

Most economists say the euro's rise is based more on the dollar's weakness than on any improvement in economic conditions in Europe, where growth remains sluggish. Some economists predict the euro will soon peak and then fall; others see the euro at $1.20 by year's end.

A stronger euro helps U.S. exporters sell into the European market, and helps European officials fight inflation by making imported energy, goods and raw materials cheaper. Many European economists said the euro had long been undervalued.

The euro's rally pinches the earnings of European exporters, however, and companies such as Volkswagen and Bayer have cited it as a drag on first-quarter profits.

I think some would tell you that if you change money either here or there through a bank or a money changer you'll end up paying in commissions or through a poor exchange rate what you might have saved otherwise.
I know how you feel..we leave on the 16th for two weeks but I'm planning to pay for everything I can with my Visa since I have learned that the best exchange rates come that way and also planning to get most of my foreign currency once I get there out of local ATMs.
You know you aren't going to cancel your trip, and shouldn't....besides, if you change the money now and the rate goes back up a bit how will you feel then? Just a thought. Am sure you'll get other points of view.

Bootman, I definetly wouldn't cancel my trip. The rates will just have to be what they are. I also will use my ATM and Visa for most purchases. A couple of my hotels are offering a 10% discount for cash so I plan on doing that also. I am so ready for this trip.
Happy Travels,
Gary (3 days to go) yippeeee

I wouldn't try to predict currency markets myself to try to engage in currency buying/selling and speculation. I thought I'd read recently that some predictions were that the dollar might be about to rise a little against the euro, not sure. In any case, it's always cheaper to exchange money in the target country than where you are, from my experience, and banks in the US charge very large commissions in my experience on foreign currency exchanges. Currency histories (like Oanda) show that the US dollar hasn't been .94 euro at interbank rates since March, though, and an individual wouldn't ever get Interbank, would they?

ttt

Your dollars are going to buy less now. Our solution was to limit spending.

No, we mortals do NOT get interbank rates and never will..and a lot of what is published and used by internet currency converters are, in fact, the interbank rates. I remain a firm believer in using ATMs to get money in the country I am in (I no longer change money here before I leave as I used to) and using my credit card for everything substantial.

I leave Sunday for a week in Ireland and was experiencing the same quandry. I decided to purchase 400 euros here to get me through the airport, really. I HATE arriving someplace and not having money for a much-needed bottle of water or a luggage cart or to tip a porter...whatever. That being said, get MOST of your spending money there. ATMs and Credit Cards are definitely the best rates. But pick up some pocket change here.

do you think. that it is better to use ATM and take cash out, or bring bring $$$$ to Italy and chage into EURO. WHat it is the best to do?
Thanks

pino, you've already asked this question in another thread you initiated.

The answer is: Use the ATM to get cash. If you bring $$$, you will have to pay a hefty exchange rate. Bring some $$$ for emergencies only.

Use your credit card for purchases, hotel, restaurants, rental car, etc. ((b))

My advise is stop watching the exchange rates! Set yourself up with many different options: Euro gotten at home if it makes you more comfortable, ATM card to withdraw Euro your first stop (and throughout the trip), cash to exchange at a bank, charge card(s) and even travelers checks for large expenses or emergencies.

Amen Budman!
M