Why is the Euro so high vs. the US Dollar?
Oct 1st, 2009, 06:58 AM
#21
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Kenav, way back about 10 messages ago, you mentioned that the FOREIGN bank's fee is listed on your statement.
To my understanding, the Foreign banks that own the ATMs do NOT charge a fee for their use... at least that is the case in Greece, others may chime in with difference from other European countries. Here are the fees as I have experienced them in 8 trips:
Interbank Currency Exchange Fee -- this is the fee that Visa/Mastercard levy (their involvemnt makes this all possible) for changing dollars into Euro/Swiss francs/ whatever. This is 1% I believe. Most banks pass this on ... the only one I hear about that "eats" this fee is the online bank, Capital One.
Your own bank's transaction Fee -- this used to average about $3 per transaction, some banks charge $5.
Your banks "greed" fee -- Many banks now ALSO charge a percentage (!!!). When Wachovia was acquired by Wells Fargo last year, it began charging 3% in addition to $3. This means that for getting $300 worth of Euros, my bank would charge $3 + $9 = $12. Larceny!
As a result, I now have a TD (formerly Commerce Bank) account I use just for my once-a-year trip to Greece. It charges no "greed" fee nor ANY transaction fee abroad for up to 10 transactions per month... and as a frugal traveler, I never withdraw that many times. I also use as back-up my Credit Union account, with similar provisions.
Of course I could even avoid the currency-exchange (Visa/MC) fee by getting a Capital One account ... and since I withdraw about $2500 for a month-long trip, this would save me about $25. I'm not sure it's worth it, since I favor "bricks and mortar" banks. But that's just me.
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And as regards the original topic, I'm no economist, but the obvious reason for the sinking dollar is that we are so much an importing nation rather than an exporting nation. It is a hard blow to our pride and self-image that we now "make" so little that the world wants ... but that is the fall-out from globalization, as long as we have such a capitalist economy. Corporations will manufacture wherever they can pay the least, in order to maximize profit. Thus we have fewer and fewer industries making things, and paying taxes here. And both people and institutions no longer wait and save up until they have the funds to pay for what they want .... and our debt, personal, governmental, and institutional... grows and grows.
A sad state of affairs, not participated in by me (a lifelong Quaker with very frugal habits, no debt, and few earthly goods), but my dollar sinks as much as those of the Big Spenders.
To my understanding, the Foreign banks that own the ATMs do NOT charge a fee for their use... at least that is the case in Greece, others may chime in with difference from other European countries. Here are the fees as I have experienced them in 8 trips:
Interbank Currency Exchange Fee -- this is the fee that Visa/Mastercard levy (their involvemnt makes this all possible) for changing dollars into Euro/Swiss francs/ whatever. This is 1% I believe. Most banks pass this on ... the only one I hear about that "eats" this fee is the online bank, Capital One.
Your own bank's transaction Fee -- this used to average about $3 per transaction, some banks charge $5.
Your banks "greed" fee -- Many banks now ALSO charge a percentage (!!!). When Wachovia was acquired by Wells Fargo last year, it began charging 3% in addition to $3. This means that for getting $300 worth of Euros, my bank would charge $3 + $9 = $12. Larceny!
As a result, I now have a TD (formerly Commerce Bank) account I use just for my once-a-year trip to Greece. It charges no "greed" fee nor ANY transaction fee abroad for up to 10 transactions per month... and as a frugal traveler, I never withdraw that many times. I also use as back-up my Credit Union account, with similar provisions.
Of course I could even avoid the currency-exchange (Visa/MC) fee by getting a Capital One account ... and since I withdraw about $2500 for a month-long trip, this would save me about $25. I'm not sure it's worth it, since I favor "bricks and mortar" banks. But that's just me.
--------------
And as regards the original topic, I'm no economist, but the obvious reason for the sinking dollar is that we are so much an importing nation rather than an exporting nation. It is a hard blow to our pride and self-image that we now "make" so little that the world wants ... but that is the fall-out from globalization, as long as we have such a capitalist economy. Corporations will manufacture wherever they can pay the least, in order to maximize profit. Thus we have fewer and fewer industries making things, and paying taxes here. And both people and institutions no longer wait and save up until they have the funds to pay for what they want .... and our debt, personal, governmental, and institutional... grows and grows.
A sad state of affairs, not participated in by me (a lifelong Quaker with very frugal habits, no debt, and few earthly goods), but my dollar sinks as much as those of the Big Spenders.
Oct 1st, 2009, 07:12 AM
#23
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travelerjan -
So maybe the fee on the ATM withdrawals are from our bank HSBC and not the bank whose ATM we used. OK.
My husband has a Capitol One card. What a pleasure not to see added fees when you get the statement with your purchases from Europe.
So maybe the fee on the ATM withdrawals are from our bank HSBC and not the bank whose ATM we used. OK.
My husband has a Capitol One card. What a pleasure not to see added fees when you get the statement with your purchases from Europe.
Oct 1st, 2009, 08:50 AM
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The ASDA store in Enniskillen, Northern Ireland (population 13,600) was the sixth busiest in the Walmart group worldwide last Christmas. Enniskillen is in the U.K., and uses the pound sterling, but it is close to the border with Ireland, which uses the euro. As the pound has fallen against the euro, prices for the same goods are much lower in Enniskillen than just down the road, and there are no barriers to travel, or cultural differences. The goods sold are identical.
This crazy situation is because the comparative value of currencies is not determined by comparing the price of goods but by factors outside the control of ordinary people.
It is why Americans are sometimes horrified by the price of goods in Europe.
Further details of Enniskillen ASDA are at http://www.newsletter.co.uk/business...-in.4862550.jp
This crazy situation is because the comparative value of currencies is not determined by comparing the price of goods but by factors outside the control of ordinary people.
It is why Americans are sometimes horrified by the price of goods in Europe.
Further details of Enniskillen ASDA are at http://www.newsletter.co.uk/business...-in.4862550.jp
Oct 1st, 2009, 08:55 AM
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To address the question of foreign banks charging an ATM fee, I have never been charged a penny by any European bank in any country for making an ATM withdrawal or using a debit card to make a purchase.
Oct 1st, 2009, 09:03 AM
#27
<<And then dropped to something like $0.80.>>
It even went below $0.70. Then, even the speculators realized how absurd that was, and it started climbing.
The speculators have a certain amount of power, but they lose it when they exaggerate.
It even went below $0.70. Then, even the speculators realized how absurd that was, and it started climbing.
The speculators have a certain amount of power, but they lose it when they exaggerate.
Oct 1st, 2009, 10:04 AM
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I thought you knew it was HSBC that was charging you that different exchange rate, your first post made it sound like you did.
My US bank also charges me 3% on foreign ATM cash withdrawals, and that isn't even for a debit card as I don't have one. They charge all ATM cash withdrawals a 3% foreign transaction fee. They use STAR network or something, I don't know if that's related to Visa or MC or not, but I don't have a debit card and have no Visa or MC logo on my ATM card. I just have a regional bank, also, it isn't HSBC or any national name like BofA or Chase. There is no foreign transaction fee broken out on my bank statements, either, so you wouldn't know what it is unless you calculate it as I do. All that is shown is the USD amount withdrawn, in fact, I have to match it up to the original ATM withdrawal slips to know how much it was in euro or whatever. There have been some lawsuits and now credit cards have to show you that fee broken out, I believe, but those laws don't apply to regular bank checking accounts, unfortunately, so they don't even have to show you what they are doing obviously.
My US bank also charges me 3% on foreign ATM cash withdrawals, and that isn't even for a debit card as I don't have one. They charge all ATM cash withdrawals a 3% foreign transaction fee. They use STAR network or something, I don't know if that's related to Visa or MC or not, but I don't have a debit card and have no Visa or MC logo on my ATM card. I just have a regional bank, also, it isn't HSBC or any national name like BofA or Chase. There is no foreign transaction fee broken out on my bank statements, either, so you wouldn't know what it is unless you calculate it as I do. All that is shown is the USD amount withdrawn, in fact, I have to match it up to the original ATM withdrawal slips to know how much it was in euro or whatever. There have been some lawsuits and now credit cards have to show you that fee broken out, I believe, but those laws don't apply to regular bank checking accounts, unfortunately, so they don't even have to show you what they are doing obviously.
Oct 1st, 2009, 11:46 AM
#30
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Here's a quick answer. The US is simply letting the printing presses roll. Nothing to back up the dollars except promises. That's also why gold is so high.
These are of course simply my humble opinions. Every one is entitled to those!
These are of course simply my humble opinions. Every one is entitled to those!
Oct 1st, 2009, 12:06 PM
#31
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Euro versus dollar? Simple. Econ 101. Supply and demand.
The feds are running the printing presses (figuratively speaking) so fast they are burning up. The Bush-Obama bank bail out has just begun.
No European bank has ever charged me for using an ATM. That is an American tradition, spearheaded by Bank of America.
The feds are running the printing presses (figuratively speaking) so fast they are burning up. The Bush-Obama bank bail out has just begun.
No European bank has ever charged me for using an ATM. That is an American tradition, spearheaded by Bank of America.
Oct 1st, 2009, 12:54 PM
#32
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I just returned from Rome two weeks ago. The dollar was 1.43 against one euro. But, even with the terrible exchange rate, prices were good compared to taking a holiday in NYC.
For example, in many nice restaurants a glass of wine was 5 euros. That would be about $7, which is very reasonable if you compare it to many restaurants in Philly or NYC where a glass of wine can cost $9-$11 on average.
A take-away sandwich was about 3 euros in Rome. That is $4.29, which, again, is reasonable if you compare it to what you would pay for a take-away sandwich at a place like the Cafe Europa chain in Manhattan.
Many Italian products were cheaper in Rome than if you bought them in the US. For example, a box of sandalwood soap from the esteemed Farmacia Santa Maria Novella was $12 cheaper if bought in Rome instead of at Lafco in Manhattan.
I saw Ferragamo shoes that were $120 cheaper at Ferragamo on Via Condotti compared to the same pair at Barney's on Madison Avenue.
So, just because the dollar is weak against the euro doesn't mean that prices are astronomical in all cities in Europe.
Now, London, the city of my birth, is another story. The prices there have always given me the shivers.
Thin
For example, in many nice restaurants a glass of wine was 5 euros. That would be about $7, which is very reasonable if you compare it to many restaurants in Philly or NYC where a glass of wine can cost $9-$11 on average.
A take-away sandwich was about 3 euros in Rome. That is $4.29, which, again, is reasonable if you compare it to what you would pay for a take-away sandwich at a place like the Cafe Europa chain in Manhattan.
Many Italian products were cheaper in Rome than if you bought them in the US. For example, a box of sandalwood soap from the esteemed Farmacia Santa Maria Novella was $12 cheaper if bought in Rome instead of at Lafco in Manhattan.
I saw Ferragamo shoes that were $120 cheaper at Ferragamo on Via Condotti compared to the same pair at Barney's on Madison Avenue.
So, just because the dollar is weak against the euro doesn't mean that prices are astronomical in all cities in Europe.
Now, London, the city of my birth, is another story. The prices there have always given me the shivers.
Thin
Sep 13th, 2014, 03:06 AM
#33
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If heading to Europe you'll need euros (EUR), and will need to check the EUR/USD exchange rate at your bank. The market rate may be 1.3330, but an exchange might charge you 1.35 or more.
Banks and currency exchanges compensate themselves for this service. The bank gives you cash, whereas traders in the market do not deal in cash. In order to get cash, wire fees and processing or withdrawal fees would be applied to a forex account in case the investor needs the money physically. For most people looking for currency conversion, getting cash instantly and without fees, but paying a markup, is a worthwhile compromise.
Shop around for an exchange rate that is closer to the market exchange rate; it can save you money. Some banks have have ATM network alliances worldwide, offering customers a more favorable exchange rate when they withdraw funds from allied banks.
So keep this l'il thing in mind, and you will have the upper hand
Banks and currency exchanges compensate themselves for this service. The bank gives you cash, whereas traders in the market do not deal in cash. In order to get cash, wire fees and processing or withdrawal fees would be applied to a forex account in case the investor needs the money physically. For most people looking for currency conversion, getting cash instantly and without fees, but paying a markup, is a worthwhile compromise.
Shop around for an exchange rate that is closer to the market exchange rate; it can save you money. Some banks have have ATM network alliances worldwide, offering customers a more favorable exchange rate when they withdraw funds from allied banks.
So keep this l'il thing in mind, and you will have the upper hand
Sep 13th, 2014, 04:10 AM
#35
Jayanth, welcome to Fodors.
Generally we don't awake old threads (in fact a thread that has been "dead" for more than a few months are left alone most of the time apart for those trying to advertise things who are triangled pretty fast)
Generally we don't awake old threads (in fact a thread that has been "dead" for more than a few months are left alone most of the time apart for those trying to advertise things who are triangled pretty fast)
Sep 13th, 2014, 06:26 AM
#39
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But Bilbo, if old threads were never awakened, we'd miss things like this:
http://www.fodors.com/community/fodo...f-all-time.cfm
http://www.fodors.com/community/fodo...f-all-time.cfm
Sep 13th, 2014, 07:58 AM
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Exchange rates do not necessarily reflect a general perception of the healthiness of the overall economy, prosperity, optimism or living standards of the general population.
They tend to reflect the financial markets' perception of whether or not the value of a currency, in relation to another, will go up or down, and also whether or not the rate of interest they could earn on holdings in one currency will be higher or lower than on another, over varying (but usually quite short) timeframes.
They tend to reflect the financial markets' perception of whether or not the value of a currency, in relation to another, will go up or down, and also whether or not the rate of interest they could earn on holdings in one currency will be higher or lower than on another, over varying (but usually quite short) timeframes.
