I'm leaving for France in a month and have watched the value of the dollar go from 6.6 to 6.0 in about two weeks...arghhh! What can one do to hedge against such losses?

Not much. You could have had the hotel quote you a rate in dollars, but I don't think that happens often in France - plus they may not have honored it after such a dramatic currency movement. <BR> <BR>Or you could have prepaid your hotel bill in Francs, but who wants to prepay? <BR> <BR>Alternatively, you could have gone to your local bank and bought as many Francs as you thought you'd need for the trip, but then you're carrying a lot of cash and the exchange rate would have been horrible. <BR> <BR>And in all these cases, the currency could just have likely moved against you as it could have for you. You've still got a month. Maybe Germany will slip back into recession by then . . .

I'm assuming you're not talking about currency futures or arbitrage, 'cause if you are, you don't want info off an internet forum. If you're referring to locking in prices, there are a couple of ways: <BR>1) Make your car & hotel reservations GUARANTEED in US$. <BR>2) Buy your airplane/train tickets in US$ before you leave. <BR>3) Buy NOW TCs in ff, not US$ <BR> <BR> <BR>

Count your blessings! During our trip, the rate was 5.1... If the rate goes to 6.4 again (the highest it's been in three years), see if you can charge your hotel bill in advance if you're that concerned about it.

I would be very, very cautious about getting prices quoted in US$. The usual response is for the hotel/restaurant/ whatever to tack on a premium to protect themselves from currency fluctuations. Once in Turkey we were given a restaurant menu with prices in German marks. We explained that we weren't German, and were only carrying Turkish lira. The prices immediately dropped by 50%!

We started booking reservations for this fall in February for France, Germany, Budapest, Prague, Italy and Austria. Budapest was the only one to quote the rate in US dollars. Probably due to the significant fluctuations in their currency. Ironically, I have seen other fodorites mention this hotel which has seen raised the price in US dollars. Other than Austria, I have watched as the rates went up and was pleasantly pleased. However, now they are as you say, back down. When we started booking reservations, we agreed to try to keep the rate at an average of $100 per night per double for the 20 nights in Europe. We booked for location, usually city center, WC and shower, smaller basically ** and *** star hotels and pensions. We ended up averaging $80 with 12 of the nights including breakfast. By booking slightly below are budget, if the rates went adversely, we were still within our budget. 3 of the 10 locations asked for 1 night deposits so those were firm anyway. Unfortunately exchange rate flutuations are one of the risks of travel. Also check if your credit card company will add any fees, this could compound currency problems. I know ours does not. The other is ATM fees. Some companies charge at both ends, others only one, so this is also important to check. Our car rental was cheaper booked from the US, prepaid, but with no cancellation fee. Therefore, that was set regardless of currency changes. Hopefully it all averages out in the end. Relax and have a good trip!!

Currency hedging is a tricky business. <BR>I follow international rates frequently. <BR>So earlier this year when the French franc hit 6.2, I acquired some francs for my trip. Guess what? The rate improved to 6.4. But now it has slipped downward. Of course, if you tie up the money in currency or travelers checks you are earning no interest, which offsets what you gain on the exchange rate. My "strategy" (?????) has been to follow the rates on a frequent basis and when I know I am going to a country, and the rates swing in my favor, I buy in advance. The gamble is that the rate swing will more than offset foregone interest. Last year I saved the price of a nice dinner by trading in Swiss francs when the rates swung our way. (Big deal!!) <BR>But you can also lose money that way, too. For most of us, the savings or gain, is not really worth the worry. I do it as sort of a hobby because I once was majoring in international economics and wrote on the subject of foreign trade. <BR>Now if you are going in for big swings, that is different. In that case, the best financial minds are scheming daily and dreaming up ways to beat the system. <BR>I am not going to try and compete with them; no way, no how because I don't know how!! <BR>I knew a Ph. D. student in Finance here at UGA. His brother was an arbitrage banker in London. They would talk on the phone about the time the markets opened in London so that John, the guy over here, could take some action when US markets opened. They would throw $30 - 50,000 around like I buy soft drinks out of a vending machine. Too rich for me. <BR>They would alternately lose their shirts and make it back.

More important to your pocket and your peace of mind will be where you choose to convert U.S. dollars into French francs while you are in France. I speak as an old, retired banker who has been over this road many times. NEVER change dollars at a hotel. Use a bank. Compare their rates shown in their windows. Second, never make a phone call from a hotel; use the PTT, the postal & telegraph office, marked with a yellow sign. Third, charge everything you can on your credit card. The credit card company deals at wholesale rates in currency conversions and passes along part of that saving to you, its customer. Fourth, convert as few dollars as you estimate you will need. Many tourists, upon arrival in France (or elsewhere) immediately dash to the money-changers at the airport -- sort of like feeding your fingers to sharks. Just change, say, $50 for "walking-around" money. Have fun. And forget about hedging the changes in rates -- you are there only a short while and hedging is a long-term talent which I doubt you have the talent or big funds or patience to learn!