1.057 USD buys you a Euro right now, more favorable to the American tourist than it's been in quite a while.
Will the trend continue? By the end of this summer will a Euro and greenback be a straight swap?
My guess is that if the Fed has to walk back their assertion that they won't hike rates more than half a point, probably.
if I was an expat living in Europe I'd pay more attention to this. It is a nice to have, but trying to time a trip to Europe based on exchange rate? Yes, it can work. But mostly for people who don't have full time jobs.
But the current rate is dependent on recession in Europe, War in Europe, and energy imports. The Fed is a follower right now.
but always remember, when America sneezes, Europe catches a cold.
Nobody here is smart or clairvoyant enough to know where exchange rates will go. I'm just glad I didn't bring home as many euros as usual from my last trip, so I'll be getting new cheaper ones over there next week. Whoopie!
This most favourable exchange rate is certainly great news and a real compelling reason to get back to France this summer, which I had planned a few months ago to take place in July. The exchange rate is certainly enough incentive to do this July trip. True, it has been a while since the rate was as low as it is currently....it's about time.
I remember when it got to $1.06, I changed one thousand dollars , the minimum demanded by BofA to avoid transaction fees. BofA gave me the rate of $1.11, fair enough. The bank has to make some money too. Those receipts of the exchange I've dumped as a way to getting rid of clutter
When the Euro was introduced, there was a time when the rate was one to one.
You betcha expats are watching and bringing money over for living expenses. Some like using Wise, formerly Transferwise, stock the funds at a given rate and then use a Wise card for payments.
It was at parity or slightly better when it was first introduced back in 2002. It made for a nice trip to the Netherlands when my son was in the military. This is the best rate I can remember since then. I’ll be spending pre-Covid euros I got in Sicily back in 2018 on an upcoming trip.
The dollar was even stronger in Feb/Mar 1985. The British pound fell below $1.10/GBP. The euro didn't exist then, but Google finance shows a back-calculated rate as low as $0.67/euro.
https://www.google.com/finance/quote/EUR-USD?window=MAX
From the perspective of someone who does a Europe trip every summer, it really is lovely when the rate favors the USD. There's something about traveling and having things cost a little less than they do at home that puts me into a more relaxed mindset. Seattle is an expensive city, so I'm definitely looking forward to this summer's trip!
When you consider many of us travel from states with sale tax at or greater than 5%, I consider this already at parity (from Kentucky where sales tax is 6%)
I recall my first trip to Italy and the Euro was exchanging at $1.06. It was the same buying stuff in Italy as it was at home.
I'm looking forward to this favorable rate when I travel to Greece next month.
While I like a favorable exchange rate, there is nothing (other than relative scale) magical or significant about a 1:1 parity, just another rate point. And yeah, I've traveled when 0.85 cents bought a euro, and when I had to pay $1.45.
While I like the Euro dropping against the USD, I would much prefer last year ... higher exchange rate and low inflation ... an equal Euro and USD doesn't matter a hill of beans if you can't afford to go in the first place, since your discretionary income for travel is now diverted to paying your bills, food for the family and gas for your car. If the Fed walks back their half point assertion with the hope of putting a screeching halt to the economy / inflation and raises the rate a full point, the markets soar and the greenback plummets (and the Euro skyrockets) ... followed closely by Mr. Recession ... either way you look at it, it ain't pretty.
Mean wages have also increased, albeit not pacing inflation. But takes some of the sting out of the dynamic you're describing.
The exchange rate may have fallen to 1.05 euro per US dollar from 1.19 euros per US dollar just 4 years ago.
But if the airfares to get to Europe have risen by several hundred dollars along with restaurant tabs, hotels and admission tickets to attractions— is the trip this year to Europe really less expensive than it was fours years ago?
The prices rising over there is to be expected. The main question is whether that is worse than here when it comes to buying power. What is the rate of inflation in France or Austria? or, in Germany. In Oct. 2019 my Pension in Berlin-Charlottenburg charged 45 Euro for a single. If it's now 50-54 Euro, it's still worth it.
Still better to have now the $1.05 rate than the $1.19 and obvious not the $1.45 rate. I have more control with the current rate.
The German year-over-year inflation rate in April was 7.4% The French inflation rate in March was 4.5%
The Netherlands inflation rate in March was 9.7%
I guess, all things considered- this may be the year to go to France!
Thanks for the information, good to know.
If the European Central Bank keeps interest rates low as a counterweight to keep Europe’s economy stimulated, then parity could happen this year or in 2023.
Looks like we made it! Caveats of course (inflation etc etc) but I'm quite pleased. It always feels great on vacation to get good value for a buck :)
I just booked a day tour at €75, which came through on my credit card as $75.57. Sweet!
Yup....from NPR today:
https://www.npr.org/2022/07/16/1111572775/dollar-euro-exchange-rate-parity
"For the first time in 20 years, the dollar and the euro are worth about the same. They have been flirting what currency traders call "parity.""
The better value of the USD is a good thing for tourism, maybe not so good for US industrial sector.
The published rate is now $1.01 to the euro.
But do keep in mind that most of us will not get the internet published rate.
Visa today is charging $1.03 to the euro.
I just purchased 100.00 € from my bank for $103.33 (I have some Euro cash business early in my trip to Hungary (not Euro) and my stockpile of Euros wont cover it).
Inflation rates in Western Europe are running a bit below the US so that will help if you want to do comparative shopping.
While it’s a good feeling to be closer to the Euro, if cost savings is the goal, look East where the power of the dollar is substantially stronger than a year ago; on top of the fact that everything is 25% to 50% less than the US to begin with.
But, yeah, it’s a good time to travel on that one account.
