Dollar dropping badly

I was in Spain in February. At the time, the US dollar equaled 0.98 euros. Today the dollar will get you 0.85. That's more than a 13% drop.

It's really impossible to talk about the reasons for this situation without getting political. So I won't. But it's not hard to figure out.

I amended my last line of post to avoid the unavoidable.

The dollar over the past five years has averaged about 90 euro cents. So we are about 5% below the 5 year average.
The value started going up pretty quickly in mid-November 2024 year and maxed at 98 cents in early January (not February).
It's been dropping at a relatively uniform pace down to the current 85cents but it took 7 months to reach this.
In return for a weaker dollar US products are less expensive around the world which increases US sales; which is a bad thing if you have already made your fortune and now want to live the life in Europe.

The five year average on the Hungarian forint is about 350 to the dollar. The current is 338 to the dollar. That means here, now, today, its down about 3% off the average.

But very much worth watching ..... but too early for holiday makers to worry.

Golf clap for Mr. E

Looking back over historic exchange rates at the time of my travels, the current rate is aligned with the historic rate and the last couple years have been the anomaly.

Lynn, thats called inflation and a lot of Europe has had more inflation than the US over the last few years.

A few small corrections for Mr. E:

• The dollar was last at .98 euros on February 2nd.
• It hit .85 on July 1st, so the drop took 5 months, not 7.
• The slide has not been at a particularly uniform pace. There was a drop from .96 to .93 between March 2nd and March 5th. There was another drop from .92 to .88 between April 7th and April 11. That's more than half the total decline in 9 days.

Here is a chart to make you feel better about the current exchange rate

https://www.exchange-rates.org/exchange-rate-history/eur-usd-2010

The value of the US dollar has zero impact on my travel plans.

Zero impact on ours too. At this point in our lives, closing in on 70 years, time is more valuable than any exchange rate. We won't postpone any planned trips this year or next because of the fall of the dollar. We saved our entire working lives for retirement travel and nothing short of a devasting illness is going to slow us down.

The dollar is often around 1.12 for a euro. The 1.02 which lasted from the November election until the day after the inauguration was an unusual drop. It is now going up about a cent a week. In July 2021, I paid 1.20 per dollar, but in October 2022, I paid 1.02. It's like roulette. Just enjoy your trip. Drink more wine in the good times and drink less in the bad.

If it helps to ease some of your pain, our Canadian dollar exchange rate with the Euro and the Pound (and the US dollar) is particularly brutal these days and has been for some time….we have no choice but to knock it up to the price of travel:)

Well, I’m glad that for some peoplethe value of the dollar against the euro has no impact, but I think for a lot of people it does

For me, it doesn’t change the travel plans, but it does perhaps change some of the things I do or places I stay. And yes, I can tell when I get the alerts on my app when I charge things that Europe is more expensive right now than it was when I was here several months ago. And that will make me cut back on some things

Well, I’m glad that for some peoplethe value of the dollar against the
euro has no impact, but I think for a lot of people it does

Absolutely. If you mfg widgets in Alabama for sale in the EU your widgets just got cheaper than the Chinese competition widgets and sales went up 35% So you hired 20 more workers to whittle widgets.

Having problems feeling sorry for the woes of you Americans. $Canadian to €Euro is 1.62, £pound is 1.91.

Lane, you are falling for the same trap by looking at daily highs and lows. Plot the curve and the curve from the first high in the last year (jan) to current is pretty smooth for this sort of thing. There is a down trend, but nothing chaotic is going on. Just life. It will correct and track up and down where market forces direct it to. If you aren't playing the market, it's not a thing to worry about.

It's really impossible to talk about the reasons for this situation without getting political. So I won't. But it's not hard to figure out.

On July 1, 2014 I was in Europe. Exchange rate was 1.37. Evidently, it's not political. It's monetary policies on both sides of the pond.

On July 1, 2014 I was in Europe. Exchange rate was 1.37. Evidently, it's not political. It's monetary policies on both sides of the pond.

I find this to be an astute observation

Well, I’m glad that for some peoplethe value of the dollar against the euro has no impact, but I think for a lot of people it does

Sure it has an impact. The price for accommodation on my next trip has increased by 10%, I prepare for such contingencies, build a flexible budget , and don't panic. I keep things in perspective, can follow historic trends and keep up on monetary policy. Recent life events also gave me a new perspective on things.

I have travelled when the dollar was up and when it was down. I prefer the up and will still go to Europe twice this year with the current down.

jkh, by the time you get there, it could be back up. But if you wait to see if it comes up and then plan it could go down before you get there. Sort of my point above. Its a few points below average right now and thats a concern for people on fixed retirement budgets like me so I go to my wish list and think, okay, this year I do the cheap ones. If the market improves I save, if it continues in the current course, I am okay cause Bosnia is not expensive (I just booked for September and the rates had a tiny bit to do with it).

Decades ago my first trip to Europe euro was 1.40 to the dollar. Obviously a more expensive trip.
Two months ago I got $1500 euro from my Credit Union which orders foreign currency at no cost. I saw the trend and the politics and decided to be proactive.
Currently in Sweden where the sek so far is not affected. However on my next trip to Italy,I will decide if I want to spend those euro or use my credit card for most everything as I usually do

Its all in the eyes of the beholder. I'm going to England in September, yes, I would love for the dollar to be stronger. I'd love for a lot of things to be different. When we were in New Zealand a bit over a year ago, we were amazed at all the great values. Then I heard a group talking about how very expensive everything was. I was puzzled until I figured out they were Canadian. I watch the dollar probably more than most, but we in the U.S. tend to view everything from a U.S. point of view.

And, of course, it matters more to some people. Its nice to have a YOLO viewpoint, but some would like to travel AND pay their rent, health insurance, etc.

Last time I went to Europe the Euro was at 1.50 dollars to Euros. It was almost 1:1 when I planned the trip.

It is what it is.

The exchange rate has been a lot worse in the past. Granted, it’s worse than it’s been for a while, but it could get worse still. A few dollars or even a few hundred dollars isn’t going to stop me from going overseas if I want to go. Save a little longer before you plan the trip. Cut out unnecessary expenses like Starbucks, going out for meals, that 6-pack of beer, cigarettes, what it might be. Those savings will more than offset the change in the exchange rate. Priorities, priorities, priorities.

As a traveler, the strong dollar is a blessing. I bought a lot of hockey equipment in Canada on the weak Loonie. But, when I was doing global capital equipment business, a weak dollar was an absolute blessing. Sales flourished when the Mark, Guilder, Lira (now Euro) and Yen were strong.
It goes up and down. It is what it is. We used to try and build scalable factors (steel prices, dollar vs. Yen/RMB, etc.) into contracts to try and level out some of the effect, but realistically, it's hard to do.
Ultimately, need drives demand. There is only one Paris, London or Rome. If you must, you will.

Mack is a very wise individual.

The offensive statement was in the fourth post following some factual statements by others, so it obviously wasn’t directed at anyone in a personal manner. But it was a casually expressed reference to investment strategy that I borrowed from one of my finance professors at University. I guess to casual for this forum. More specifically, playing the daily market is rarely successful for the average investor; and by extension, trying to live off the daily market figures will rarely lead to the best quality of life. That’s not condescending, that’s pretty much a reality.

Each to their own but I plan around the average rate over the past few years and keep maybe as much as a 5% contingency plan on things other than airfare and hotels (which are purchased in advance at a known rate). If the rate drops by 5% that could be 5 or 10 dollars a day depending on the daily budget of the particular trip.

So, for those that I offended, my sincere apologies. I will endeavor to be less relaxed in my language in the future.

In 1985 the US Dollar lost half it's value against the DM. That was kind of hard to take.

Blockquote

In 1985 the US Dollar lost half it's value against the DM. That was kind of hard to take.

I remember that one very well. We sold a ton of gear to Blaupunkt, Bosch, other German companies. I did not bring home any nice Stief toys for a while and the ones I did were the tiny ones.

Our German subsidiary stockpiled dollars as a hedge. Many travelers (myself included) will hold on to a stockpile of well-priced Euros. Even now I have a wallet full of RMB.
But all of that said, most travel is discretionary spending. If you can afford it, you will probably decide to go ahead and deal with it. Maybe you spend fewer nights, stay in gasthauses instead of the Ritz, do bread and sausage for lunch, not have the second or third Kirsch, rent a Fiat instead of an Audi........

As a traveler, the strong dollar is a blessing.

Exactly. As this is a travel forum, a weakening dollar - short term, long term, historically, or whatever - is a "bad" thing for US travelers. No one wants to pay more for anything. I also think most folks who plan ahead are hoping for consistency in costs, so when the dollar gets stronger, they get to do a happy dance, but when it gets weaker, they tend to be unhappy about it.

Can any of us do anything about it? Nope. Do we adapt our actions around it? Sure - in small or big ways depending upon how tight things are individually.

I find the costs of travel in general to continue to be trending up, as supply/demand impacts are definitely in play. The "business" side of travel - hotels, airlines, even museums - have upped their games dramatically with technology, so their being able to do rapid adjustments to pricing can make a trip - regardless of dollar strength - wildly vary from day to day.

We see the fluctuations in the dollar and that's easier to worry/think about, but I definitely feel like the biggest impacts to my travel are likely coming from the sheer volume of travelers nowadays and the way that influences the costs and the overall experiences I can have.

I prefer a strong dollar, but maybe if that softens the volume of folks traveling abroad, I benefit in other ways. Probably a rude perspective - my gain at others' loss - but making lemonade from a few lemons is definitely a requirement these days.

We see the fluctuations in the dollar and that's easier to worry/think
about, but I definitely feel like the biggest impacts to my travel are
likely coming from the sheer volume of travelers nowadays and the way
that influences the costs and the overall experiences I can have.

So, truel. Look at Croatia. Once a wonderful beautiful bargain, not it wants to be Switzerland (okay, "wants" not there "yet").

Here is good news. Apparently transatlantic flight costs are down quite a bit. Maybe enough to offset the 5 or 6% drop in the dollar. https://www.japantimes.co.jp/business/2025/06/18/airfares-europeans-us-travel/

Here is good news. Apparently transatlantic flight costs are down quite a bit. Maybe enough to offset the 3% drop in the dollar. Maybe enough to go beyond that. https://www.japantimes.co.jp/business/2025/06/18/airfares-europeans-us-travel/

This article confirms more or less what I am seeing; I am presently monitoring prices for the August to October time period (I am not interested in traveling in August, or even September, but I like to track flight prices over the months prior to the month when I want to travel, October) and I am seeing better prices than I found last year at this time for the same destinations in those months. Prices are very steady on google flights for October; September prices are up and down a bit, but overall they are lower than last year, lower than what I paid for an October trip last year. Typically when I track prices they gyrate up and down every few days, often +/- 10 to 20 percent, but that is not happening this summer, prices are holding steady (fewer google price alerts for sure) and the prices are better than what I monitored last summer at this time for trips I took in October and December.

Jojo, The drop is closer to 5 or 6% I think (I corrected myself).

I just purchased a roundtrip September transatlantic ticket on Lufthansa for about $550. 55 days prior to the flight. Its a Economy light ticket so no checked bag and no free seats until checkin. I will watch the seats and if it looks like there wont be an asile seat I will just buy one .... under $50. Pretty much the cheapest I have ever made the trip.

It went up a cent yesterday.

See!!! Salvation!!!!!!!!!!!!!

Seriously, without meaning to demean anyone. Because I live in Europe off US retirement savings the exchange rate hits me harder than most on the forum. I made some choices to compensate. My fall fishing trip is 9 days instead of 15 days and my transatlantic trip is 6 days instead of 16 days. That ought to pretty much get me back to even.

I'm fighting global climate change.

I subscribe to travel alert newsletters and they keep screaming about how ultra-low the airfares are to Europe. And then I look at hotel prices which are very sobering. Left hand, meet right hand.

As Roseann Roseanadana would say, it's always something.

Looking at the long-dated us treasury movements, I don't think the dollar will recover soon. Short term fluctuations happen, but sadly the long term future makes me very nervous.