Buying Euros

I'd pile that money into a broad market index fund instead, just my 2 cents. Unless you really know your stuff I think it is an absolute crap shoot.

It's called currency hedging or speculating depending on the amount. Hedging if you are in effect buying currency contracts covering what you intend to spend, speculating if it involves leverage. Now that said, currency trading, because of the cost of trades, tends to be for large amounts of currency.

You might be able to do a an indirect hedge by buying Euro-denominated bonds, but that adds an interest rate component to the trade. If interest Euro rates go up, your bond values goes down. You could minimize this by sticking to very short term Euro bonds. But buying bonds also involves a cost.

Bottom line is you would need to be planning a very expensive Eurozone holiday to make the effort worth while and who knows if the Euro will drop even further.

If you still want to trade, look at:
http://www.fxcm.com/forex-trading-demo/

http://www.fxcm.com/forex-basics/why-trade-forex/

It is a sucker play but you might get lucky. The Euro is 1.08 today. The best price you could probably get for maybe $1000 would be $1.14 - 1.17. You pay a premium of maybe 5 to 8%. Throw in an opportunity cost of at least 2%, or another .03. That means the Euro would have to climb to something around $1.20 before you would breakeven. So the question is - what is the probability of the Euro raising about 18% in next year or so? Who knows? Goes two years, the euro would need to raise about 20/22 %. There are other place I can put my thousand dollars with a better potential for profit.

The others are spot on. It costs money to buy foreign currency so you need the market to change in your favor by that much and more since you'll be sitting on the cash under your mattress for that time. And if it changes against your favor, then you are really in the hole.

The only advantage for buying ahead is locking in your costs. Unfortunately from discussions here, there appears to be no way of simply buying euro in the USA without incurring a large commission fee or other charges. Of course I am sitting a lot closer, but I can buy euro cash for 1.5%, even less for large amounts from a broker.

Frank broke it down nicely.
If the current rates hold, my trip in May will be almost 25% less than when I went three years ago.

Maybe. In all probability prices have risen 15 to 20% in the past three years. We are going to be in London in May and Turkey in Oct. Hotel prices are up a good 20% over two years ago.

You pay a premium of maybe 5 to 8%.

A better (lower cost) hedge tool is to buy an Euro denominated ETF such as CurrencyShares Euro ETF (Trade symbol FXE). Its annual expense rate is 0.40%, but you will incur sales cost buying and selling. Depending on you situation, the trading cost can be nothing and up.
https://finance.yahoo.com/q/pr?s=FXE+Profile

Fund Summary

The investment objective of the Trust is for the Shares
to reflect the price in USD of the Euro. The Shares are intended to
provide institutional and retail investors with a simple,
cost-effective means of gaining investment benefits similar to those
of holding euro.

Wow, I didn't expect to get so much information, but thank you. It is as I suspected. The increased fees and/or poor rates given here in the states may very well offset the currently good exchange rate. It just makes me a little frustrated knowing that I usually get a much poorer rate when traveling that I would get right now. I guess timing is everything. I personally would never have the confidence/knowledge/guts to try and outwit the market. Guess I'll just keep saving my money and hope for the best. Thank you.

It is the cost of doing business or traveling. I needed Euro for Cuban trip last month. I normally have about hundred euro or so left over from the last trip but I want another three or four hundred for the trip. So last fall I bought 300 euro for $1.30 from a friend who had just returned from Europe. Fortunately I spent most of them in Cuban but am still down. Headed to England/France in May and Turkey in Oct so hopefully will benefit from near parity of the Euro. The percentage of euro change in my budget is so small when compared to the thousands for air fare, lodging, and food, it is not worth worrying about.

I am confused as to why everyone worries about the cost of Euro vs American Dollar. What is the difference? A few cents on every dollar? Is that really gonna make or break your trip? Please explain. I NEVER worry about it.

I am confused as to why everyone worries about the cost of Euro vs American Dollar. What is the difference? A few cents on every dollar? Is that really gonna make or break your trip? Please explain. I NEVER worry about it.

In the short view, you are correct which is why all of us here say don't worry about it. Currency fluctuations happen in small increments. But a lot of novice travelers that come here for advice don't understand that the difference is marginal.

In the long view, it most certainly matters. The euro has dropped over 20% since last fall (or the dollar has gained depending on your perspective). 20% matters when compared to the cost of a tip last summer and what it will likely cost this summer. And it has a massive impact on trade and economics.

We have an upcoming summer month long trip for 6 people! I have a friend going to France next month for a vacation. She'll withdraw euros from a few ATMs while there to bring back for me. I've been watching the currency market for a few months now and I'm ready to have more than the mere 200 euros we brought back last summer since we are traveling with more family members this summer. It's nice to have a friend going now who will bring back some euros that I'm happy with the current exchange rate. We've been going to Europe every summer for the past 17 years and this is the second lowest exchange rate we've seen.