please explain dollar strengths
 

i am going to europe (ITALY) for my first time ever . my friends keep telling me how strong the dollar is over there and what a great time to go .not wanting everyone to know how unaware i am of iternational financ e i just shake my head and say"i know" , when really i have no idea of the implications of a strong dollar .. PLEASE HELP and pretend you are dealing with an idiot many thanks ---be gentle with me

In simple, layman's terms, the stronger the dollar, the more lira you will get when you exchange your American money (whether it be cash, travelers checks or an ATM transaction). Thus, the sronger the dollar, the more you'll get in return when you spend your lira! <BR>That's an explanation at its most basic!

Hi Disco, you can buy more stuff when the dollar is stonger,,,,,that is how my mind processes international finance.....they don't call me "doodeyhead" for nothing! <BR>Judy ;-)

If you've ever experienced the frustration of having to pay a fee to cash a check from an "out-of-state" bank - - that's the equivalent of a WEAK dollar - - getting less for your money because they don't know the reputation of this bank of yours. <BR> <BR>Having a STRONG dollar is the opposite - - it's as if they are saying - - wow, your "bank" is so well-known, so prestigious, and so credit-worthy that we want to offer you a 5% discount (or 15%!) on everything in the store - - just to get your business. <BR> <BR>Best wishes, <BR> <BR>Rex <BR>

The above answer is a good one. Also think of it this way. The money of various countries is bought and sold just like any other commodity such as corn or wheat at various wholesale and retail rates. There are all kinds of elaborate tables showing currency values throughout the world. Big traders enter into complex futures contracts for currency just like they do for food commodities. <BR> <BR>The US economy is stable and strong, particularly when compared to others. Many people around the world want US dollars, hence they are willing to pay for them. In economic terms, there is a strong demand for dollars. In fact I recall that a South American nation actually adopted the US dollar as its official currency. For many years there were millions of dollars of US green floating around Russia because the Russians did not want their own currency. <BR>The result is that US dollars sell for relatively high prices on the world currency markets. The other side of the picture is that we benefit overseas when other people have to pay more to buy dollars. <BR> <BR>The first year I went to France, the dollar was not quite as much in demand. <BR>I believe I got only 6.8 francs for each dollar I exchanged. Last year, I got 7.6 francs for each dollar. <BR>At the ATM machine I got more francs for each of my dollars. If I withdrew 1000 francs, I paid about $132 for them. Earlier, I paid $147 for the same amount. Given that my hotel bill was about 5000 francs each time, the difference in cost to me was $78. (More than $10.00 a day.) <BR>It is not a monumental amount, but the stronger dollar means that everything is a little cheaper. (Of course France has inflation, too. A carnet 10 Metro tickets rose in cost from 55 francs to 58 francs between visits.) <BR> <BR>It will be interesting to see what the impact of the euro will be in January, 2002, when the 12 nations that are members of the euro union begin a quick phase out of national currencies as euro bills and coins reach the street as a common medium of exchange. <BR>Right now the euro is relatively weak against the dollar, selling for 85 US cents. (Or buying $1.00 at wholesale for about 1.175 euros.) <BR> <BR>The strength of the dollar means that Europeans have to pay more to visit the United States. Whether or not the higher cost of the dollar is directly responsible remains to be analyzed, but foreign visitation at US National Parks is down so far this year about 10%.

You do not have to go to Europe to see how the high dollar works well for us when we travel and punishes those who come here. Consider the Canadians. Today Canadians must give us about 1.5 of their dollars for one of ours. Not too many years ago Canadians only had to give us .95 of their dollars for one of ours. Are we seeing fewer Canadians visitors? That is hard to say. But Canadians who once spent entire winters in the United States now spend much less time here. Is this good for the U.S. and bad for Canada? That, too, is hard to say. Remember: when Canadian money buys less here, they spend less -- less on motels, less on food, less on gas, less on everything. And thus who is the poorer? Notice what happened to the value of the British pound immediately following the recent election there. Will this affect British tourism here? Will this affect American tourism there? If this disparity persists or increases, who benefits?

There is always a time lag between the movement in exchange rate and its impact on tourists and visitors. Air fares are priced in the home currency and are dictated more by seasonal supply and demand than exchange rate. If you buy a package tour, the price you pay has been worked out months ago at the prevailing rate and doesn't usually change until a new brochure is printed. It's the same if you pre-pay your car rental. Only your on-the-spot expenses will be affected, like meals (if not included), drinks, shopping, admissions etc. If you travel independently, you will of course be more susceptible to exchange rate fluctuations, but even then not all is lost when your currency's value goes down. Once I booked a vacation home in Germany and agreed a price in DM. But before departure the value of DM shot up by 20%. I went back to the German host and explained the situation. And she offered to split the difference by knocking off 10%. I don't think it would have worked with more commercialised operators like hotels as an individual traveller, but I know tour operators often re-negotiate rates with hoteliers in cases of adverse currency movements.

Hi disco--lira is very high right now--means your US bucks can buy lots more STUFF--good,if you are in shopping mode or even for meals and hotels-means stuff is actually cheaper for us to buy with lira--USE A CHARGE CARD when you can ---and do NOT bring home any coins or lira under 10,000 lira as you can trade it back to US banks

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Ofcourse, the brightest are the hotel /villa owners who negotiate rentals in Dollar terms, so they are ones who gain, in local terms! In short, negotiate hotel rates in local currency terms.

Exactly how much are we all saving, $100.00 on a $3000. OR MORE trip. whatever, just have fun and don't worry ABOUT IT . If you can't afford it save up, go into debt. ask Mummy for the money.Figure it out,,is it really worth the time and effort spent for a few dollars. The rate may be 10 cents down , how much are you spending that it's worth all that worry and figuring

Hi Disco-- <BR> <BR>Not a stupid question at all-- how would you know if you've never exchanged money? I'm not going to try to explain it further, as the others have done a fine job, but I do want to add that this unfortunately does not mean that everything will be cheap. As they say, it's all relative. Italy can be a fairly expensive country, so all the strong dollar means is that it is somewhat LESS expensive than it might have been at some other time. Which of course doesn't mater at all, since you're here NOW! <BR> <BR>When I travel, eventually the local currency stops meaning much to me. I notice if menu prices seem higher than the last place, but I don't think about what it would cost at home. This is a good strategy for things like food that you don't have the option of not buying. It's not smart for shopping, because you should still try to compute what your purchases cost in dollars so that you can judge if they are worth buying. Anyway, it works for me!

Since it's your first time going to Europe, this won't really mean a whole lot to you this time. But the next time you go back, you will notice a difference in how many lire you will get for your dollar, compared to the trip you're about to take. For example, when I went to Paris around 10 years ago or so, I got fewer than 6 French francs for every U.S. dollar. On the trip I just took, I got over 7 francs for each dollar. In other words, one dollar bought me more this time than it did last time. It may not seem like a big difference, but it adds up! The exchange rate you get on the trip you are about to take will be a benchmark against which to compare rates on future trips. <BR> <BR>Don't worry about it too much -- just have a great time.