I heard an economist on the radio this morning say that the Euro is $1.19 right now and he thinks it will stop rising when it gets to a round number ($1.20) and they'll leave it alone for awhile. I sure hope that is the case, as we have rooms reserved in Rome and apartments reserved in the Cinque Terre for the first of October, and our cost for them seems to be going up almost daily!

I wish it was true too Jennie!!
And just for the record, I'd never cancel a trip to Europe based on the exchange rate, the benefits of traveling far outweigh the extra money I'm spending!

I've been to Europe in the past when it was worse than now, so it doesn't change my plans at all. I'm not a big spender when I travel, so it doesn't really make that big a difference to me, frankly, in terms of my overall vacation budget and income. Getting a vacation and going where I want are more important to me than spending an extra $25 a day due to currency valuations. Air fare is one of my biggest expenses and that's outside the euro value problem.

I wouldn't go elsewhere for that reason, but maybe for variety. i've been to Canada and just am not that interested in it and didn't find any bargains there, anyway. The fact that one CAD is worth less than a USD doesn't make things cheap or a bargain -- they just jack up the rates to make up the difference so things end up costing in USD about the same as in the US, in my experience. I can go to France about as cheap as Quebec, except for Air Fare.

To answer the headline question -- I'm going anyway because I'm renting an apt which is prepaid and have my air ticket, but if I didn't, I might consider cancelling this year if the Euro cost over US$1.50, as that would be unusually high -- assuming I thought it was some weird blip that wouldn't occur next year.

The rising Euro may well discourage some budget-minded travelers this summer, resulting in less crowded airports, flights, and tourist attractions for those of us who will travel anyway. I'm not happy to spend more, but I may be buying a better travel experience inasmuch as tourist overcrowding has been cited here as an issue in both Venice and Prague. I also hope vendors run "sales" to offset the exhange rate differences.

Okay - - I've got as much business giving investment advice as Laurel and Hardy - - but I predict that if the dollar:euro gets to 1.35 in the next 90 days, you can make book on the US stock market rising 8-15% during the same period. European (and other worldwide) investors will not be able to keep their hands off cheap American stocks. Increased demand will always result in increased prices for equities.

If you have money to put into something good and diverse (like QQQ for example), put your travel funds (or 2x or 3x) in the market, and you will cover the difference in the value of your dollars to euros.

Best wishes,

Rex

Lauren, THE FOLKS THAT ACTUALLY PAY TAXES GOT A TAX BREAK!

If I had a trip planned for this summer or fall, I wouldn't cancel it due to the falling dollar. What I might do, instead, is merely scale back the number of days I planned to spend in Europe, leaving my estimated total cost roughly the same.

That being said, I'm sure glad we decided to go to Italy a year ago when we did, when the dollar was buying a lot more.

WanderingTexan, the issue with Bush's cherished tax cuts isn't a concern that people who don't pay taxes are getting tax cuts.

Rather, the issue is -- Paul Krugman notes in his NY Times column today -- that "the tax cut passed last week will raise the after-tax income of most people by less than 1 percent . . . But people with incomes over $1 million per year will, on average, see their after-tax income rise 4.4 percent."

And this is all without reducing spending, creating huge deficits.

Krugman also quotes the Financial Times, which he refers to as "traditionally the voice of solid British business opinion" as writing, in regard to last week's tax bill, that "the lunatics are now in charge of the asylum." I couldn't agree more.

Wandering, I'm not quite sure if you understand Bush's tax plan. Since this is an anonymous board I can tell you that I am in the upper 4% tax bracket. My significant other works 80-90 hrs a week and we will not benefit at all from the tax cut. The only person that will profit is the American in the upper 1% - multi millionaires & billionaires. The CEO of Microsoft will now take home an extra 35 MILLION this year by the tax dividend scheme. With so many technicalities this new change only applies to a specific few, not the average stock holder. Now tell me, do you think the guy pocketing the 35 mil will create more jobs with his increased personal income? lol