Euro vs. USD value and Short-term volatility. Travel this summer or postpone?

Whenever you decide to travel outside of your home currency at some future date, you become a currency speculator. You have to live with that. I have been doing this since the Euro was instituted, and have seen anything from parity to 1.40 USD to 1.00 EUR.

Either way I'm considering ways to "soften the blow". For example, $500 saved by shopping around on air fare may make up the hit on the exchange rate over the duration of the trip. That's my initial reasoning at least.

I don't think this strategy would apply to anyone who flies "first class". :-)

”Do you plan to make other adjustments to compensate, e.g. stay in less expensive hotels, less convenient air travel arrangements, less time away or eat at less expensive restaurants? Or maybe you can afford it and you're going regardless.”

I reserve all of my hotels and B&B’s through Booking.com for convenience sake, and I have been paying for them immediately - most give that option. Booking knocks off more money when that’s an option, plus I can see when I get close to the trip (Christmas Market trip last month), how much I saved not delaying to the travel month exchange rate on the reservation. I have a trip to Spain soon, and that also has applied. Update: an additional new perk now on Booking.com is they track prices from the point you reserved it. If the price goes down, they credit that amount to use on another reservation. They have given me a couple already.

One area of savings I take when prices are higher is selecting the cheapest option on the type of room available in a hotel for places where it doesn’t matter. I select the nicer room option for just a few (I move locations often) where I have a reason to enjoy the room more - a view in a small town, etc.

I save a lot of money by doing my own itinerary and traveling by train. That’s by choice; I love it! That decision isn’t money-driven - just a secondary benefit.

I fly Comfort Plus on Delta - have flown a couple of times on Premium Plus, but I am happy with Comfort Plus.

One huge money-saver is to go to cities that aren’t on the main tourist routes. Hotels, food and especially museums are less expensive. I was in northern Italy last year, and as an example - the museums in Pavia & Asti were either free for people my age or just a minimal charge. Attending festivals is another way to make your money stretch, yet have a fantastic local experience.

If you are concerned about the exchange rate going the wrong way, you can always pay when you book and book months before you go (though there is also cancellation to think about).

I do not think the exchange rate for Americans will improve substantially under the current administration. If you are waiting for a more favorable exchange rate, you may be waiting years. But regardless of what I think on the direction of exchange rates, trying to time exchange rates is to some extent like trying to time the stock market. I am not sure who can do it, but I know I can't do it.

Is this impacting your European travel plans?

No. October '22 was the anomaly, in January '21 it was .82. The current exchange rate is within historic norms. When you plan your budget are your plans based on the assumption that you'll always have the favorable exchange rate? Or do you pad your budget expecting the exchange rates to fluctuate?

I think in the moment the exchange rate is the least problems tourists from Europa should have. Much more serious problems are all the new requirements and questions for getting an ESTA. And even if you got it, you cannot be sure if you really are allowed entry to America. And to say: I really don't want to visit my beloved America in the moment.

The value of the US dollar against the euro is rather high by historical standards. Don't just look at the last 3 years.

As of today €1=$1.17.
It has been hovering between $1.15 and $1.17 since around June last year.

The Euro was lower compared to the USD in 2022 all the way to early 2025, therefore a better deal for Americans traveling to Europe between 2022 and early 2025.

But if it makes you feel better, between June 2020 and June 2021 the Euro was a bit higher. Of course few Americans traveled to Europe then due to the pandemic.

And, to make you feel even better about the current exchange rate of $1.17, I want you to know that between 2004 and 2014, for about 10 years, the Euro was very high and ranged between $1.20 and $1.60. I go to Europe every year, and for personal and family reasons sometimes 2 times a year. I also had to contribute to my mother's payments for her 24h/day caregivers and nursing home between 2011 and 2023, when she was alive, therefore it was a major budget killer for me.

Just imagine if you had to travel to Europe with the exchange rate at €1=$1.60 like it was in the summer of 2008. Everything in Europe would cost an American traveler 36% more than it costs today.

Therefore enjoy the $1.17 per euro that you have today, because that value is a pretty good deal for Americans by historical standards. Actually $1.17 is the same value that the euro had when it was launched on January 1, 1999. You will also notice that the cost of living (food and accommodations) in most European countries will be lower compared to the costs you would incur if you vacationed in NYC or San Francisco or Hawai'i.

EDIT: Roberto da Firenze ⚜ we are on about the same path.

I “obtained by a simple google search” and I belive with my own eyes that it did not appear that today is the worst in the last five years. Among the worst, but not “the” worst. To me it looks like over the last five years the euro has been costing $1.15 to $1.17 bouncing up and down with a few breakout moments like in July and September and December of last year. But every time things popped up high it was followed by an equal or greater dip. It’s just the market bouncing along. If your business is manufacturing, you might have more euros for holidays as a weak dollar helps exports. There are always winners and losers.

If people are planning around the best or the worst moments in the market, they are … well I wont say it. I suggest looking at the average. The average for the past five years has been about 1.12 dollars to buy a euro (i just sort of eyeballed it ... open to correction). Today it is 1.17 dollars to buy a euro. That is today means I need 5% more in USD (70 cents) to buy the same 14 euro donner kabob in Berlin. That will come back to 0% (probably) In the next few weeks and might even drop below where I do better than the 5 year average.

https://www.macrotrends.net/2548/euro-dollar-exchange-rate-historical-chart

Half the cost of your trip is the flights. You paid for them in USD, no impact. Now the impact on your holiday is 2.5%. Wait you are on a RS tour. That price is fixed in US dollars, now the impact is $3 a day in spending money.

Is it impacting my European travel plans? Well, I live over here but I live on US Investments channeled to me through a US bank account. So, yea, it has some impact. Well, I don’t live in a Euro country but about the same is happening with the Forint. I will survive because I dont worry about that which I can not control and because I feel pretty certain that the dollar will come back.

This is not impacting my Europe travel plans. I am in the position of being able to see the light at the end of my travel tunnel so I need to go while I can.

I've got 2 trips planned this year - Paris in the spring and England/France in Nov/Dec.

I don't pay ahead for hotel rooms. It is what it is. I've also just booked a June trip to Yellowstone to take my great-nephew. I need to stay in a nicer place with him over where I usually stay and the rate for ONE night at Old Faithful is $450 which is WAY more than my Europe nights. So honestly, even with an unfavorable exchange rate it feels like a bargain.

Plus I did travel when the exchange rate was favorable to us so it probably balances out anyway.

I’m seeing the average over the last 5 years as .91 euro to usd, so we’re six points down. Point taken on 10/22 being anomalously high. It’s still deflating when you see the value drop over 10% from a year ago.

Of course it all depends on your finances and your desire for the trip. I will admit to checking quite frequently but it has rarely made a difference. The only time I remember it making a difference was when I was first married. My wife and I were taking a night time German class at the Jr. college. The dollar was very strong and I thought we would stay at a hotel which was on a poster in the classroom. The dollar was very strong against the DM. We didn’t go that year and the next year the dollar had fallen quite a bit. We went but just changed to staying in a less expensive hotel.

Guessing currency exchange rates is notoriously impossible even for the professional, but here we are looking at a long term shift; Chinese banks and government are slowly dumping the US Treasuries they own and buy gold, this way the dollar goes down and gold goes up. (I got this hint from a relative, a bond trader for one of the five largest banks on earth, exactly one year ago, and I would say that my retirement funds have taken advantage). You can expect this movement to increase after the last spat about some European countries getting extra tariffs as some dollar investment will be possibly dumped. Probably nothing dramatic, the newspapers like to talk about commercial wars being threatened and fought, but the real thing will more likely be a slow and long trend, the Chinese way. But I would expect the dollar to go down, long term. This is another reason why I always say, the moment to travel is now, next year could be more difficult.

It's easy enough to find ways to economize on any trip. I am far more concerned about other kinds of "volatility" than minor fluctuations in US dollar exchange rates.

None of us saw COVID coming. Now events are moving towards a variety of awful potential outcomes looming just over the horizon. Rather than postponing travel in hopes of things getting cheaper, I'd say if you want to go, it would be prudent to go sooner - while you still can - rather than later, or else be ready to accept things being different later.

Good point on the European hotels feeling like a bargain compared to the USA. We recently stayed at a five star hotel in Spain for around $140 per night, admittedly in the low season but still... I’m not one to book into luxury hotels but at this price why not, it’s cheaper than the Red Roof inn.

Nope, hiccups in the exchange rate are not going to change my plans. Circumstances beyond my control, like another pandemic or ..... are another matter. Then, of course, all bets are off.

Exactly what Roberto said. It varies quite a bit. I bought one apartment at 1.20 and another at 1.02. Those of us connected with both systems since the beginning of the € have experienced much higher and much lower. We can’t spend a lot of energy trying to beat a system. There are no coupons we can cash in for better terms.

I do not have a travel budget; I've never had a travel budget. I just do things on the cheap to the degree practical. I can't control the exchange rate, and at 74 I'm not going to postpone a trip for financial reasons.

Things that cost extra money do happen (see my list below), so my policy is to go where I want to go, eat what I want to eat and see what I want to see, but I do it as inexpensively as I can, every day. I look for a well-located hotel with reliable Wi-Fi, hot water and air conditioning, but I don't mind what I call "dorm-room decor". Therefore, I stay in 2-star and low-end 3-star hotels if they're available when I make my (usually very late) reservations. I don't opt for a nicer room just because it's not too much more expensive. Sometimes I'm too late for those less expensive places and end up in a Motel One or the equivalent. I just say "Oh, well" and move on, because I've been as frugal as reasonably possible on other things.

These are just some of the unfortunate events that hit my wallet during trips to Europe over the last ten years:

• Loss of over $150 in Bulgarian lev to a pair of pickpockets.
• Problems with charging ports on two smartphones, leading to purchase of a wireless charger and a 90-euro repair (the latter possibly a scam).
• Payment of $200 for the cheapest-available aisle seat on my eastbound transatlantic flight when United canceled my original departure and there were no free aisle seats available.
• Purchase of a £120 last-minute ticket from Jersey to London-Luton and subsequent bus ticket to Poole when my ferry was canceled.
• Apparent suitcase damage by airline, requiring purchase of replacement bag mid-trip.
• Medical expenses (partly reimbursed by insurance).

Stuff happens. I'd rather travel relatively cheaply all the time so I don't have to worry when something unpredictable and costly pops up.

Just imagine if you had to travel to Europe with the exchange rate at
€1=$1.60 like it was in the summer of 2008. Everything in Europe would
cost an American traveler 36% more than it costs today.

I traveled in 2008, when the Euro was $1.60 and the pound sterling was about $2 USD. I didn't change my plans but I certainly cut expenses where I could (less sit down meals, fewer pricy activities). I had saved for the trip with cushion and had a great (but expensive) time.

There is no way of knowing what the future holds based on past rates or prognosticator's predictions. Travel is not inexpensive and there can always be unexpected costs (e.g., travel drama, exchange rate changes, all the things acraven mentioned). If your personal financial situation is such that the current rates are uncomfortable expenses for your budget, or you can't afford an unexpected expense, then you may want to consider postponing and saving your pennies for a future trip.

Have you considered that the 1.03 USD to 1.00 EUR was a temporary "super sale". The current 1.17 USD to 1.00 EUR may be a more normal rate and could go to 1.30 USD to 1.00 EUR or higher and stay there for a very long time and you will have missed out on traveling to Europe basically forever. What did Doris Day used to sing? "The future's not ours to see. Que sera, sera."

Considering the overall cost of a trip, a few extra cents per Euro (or whatever currency) is nominal. If the currency fluctuation breaks your vacation budget, you probably shouldn’t go overseas. I have no idea how you came up with a 20% hit since the exchange rate hasn’t changed significantly in a number of years. While it could get worse, it could also get better. Even within a trip the rate could change by a few cents

I remember when it was $2.08 to £1, but also when it $1.03 to £1. With the Euro, I remember $1.35 to €1 and $1 to €1.03.

If I want to travel, I’ll travel. Not being able to travel during COVID was bad enough. I’m not going to not travel because of the exchange rate.

I’m seeing the average over the last 5 years as .91 euro to usd

If your bank will sell you Euro at that rate you should buy! Currently they are charging .86 to purchase. I bought my normal supply for the week yesterday. Sell to the bank only gets you .83.

And the worst deflation I've ever seen was between 1983-1986, when the US dollar went from 4.25 DM to 2.20 DM. That hurt.

And what politicians seem to fail to grasp, is that loss of buying power is inflation. And that is an immediate impact on what you can spend, as per the OPs original question.

https://www.youtube.com/watch?v=DHwfvMA40eE

As is most things in life, nothing gets cheaper.

Well most things.

It's not just the exchange rates. I re-visit places I like and noticed prices going up for just about everything.

I would not postpone a trip on currency rates. The modest savings one can count on by "timing" their trip to unpredictable currency fluctuations seems not worth the hassle. If a budget is tight, I think the OP's question alludes to the better solution - ride out a weaker dollar at the relevant moment by adjusting other expenses, e.g., dining options, paid excursion costs, hotel choices, etc. I would not include flight in that list of adjustable expenses because that's almost impossible to time relative to a short-term currency issue unless you are buying airplane tickets last minute which is not generally considered best practice for finding the best tickets for European destinations.

Watching CNBC a while back, they had the “Bond King” Jeffrey Gundlach on. Now the bond guys (as an opposed to the stock guys) are supposed to be the smartest folks in the room. And the Bond King is supposed to the be smartest of the smartest. And so Jeffrey Gundlach who has been “constructive” on all things US for decades had a decidedly different take this time around. He said abandon all hope and desert all dollar investing! “I wouldn’t own any US stocks. I would own local currency emerging market bonds. I would own foreign stock in their local currency and benefit from that translation.”

So turning that in travel advice, cash in all your dollars to pesos or Turkish lira and travel now! Live it up! Pack your bags and turn your dollars into some other currency while the getting is still good!

Note: These bond kings and similar wizards of finance have successfully predicted 10 of last 2 major downturns.

Me? I’m even worse. Every year I predict the Cleveland Guardians will win the World Series. So far my record is perfectly wrong!

Happy travels! And I do feel the sting of the less robust dollar and worry about the future and also how the Guardians will do after Seattle stole Naylor from us (politely).

One of four major German funds (DWS) expects based on multiple indicators that USD will be weaker against EUR in the near future but not so much like in the last 12 months (~11%).
Source: today's Telebörse interview with Madeleine Ronner, fund manager DWS.

If cost is your deciding factor, the only reason to postpone is because you think it's going to get better. In my mind, it can get better, worse, or stay the same. Thats two out of three reasons to go anyway.

Quite right that the $ is at its lowest point since October, a pathetic situation. Starting in 2023 I have been tracking the $/Euro exchange rate, and those times when the rate stood at $ 1.06 to $1.03 I went to BofA to exchange a minimum of one thousand dollars, usually anywhere from twelve hundred to close to 2 thousand or a bit more.

I've kept all the receipts of these transactions, marked them by date. If the official rate according to the WSJ was $1.04, I can expect Bof A to offer a rate of $1.10 or even better, $1.09. You can almost guess that.

All those Euro, in denominations of 50, 100, 20, the max exceeding 3,600 Euro I carried on my person in 2024 and 2025 flying out SFO to CDG, ie in the hidden pocket, neck pouch, wallet, waist belt, and in a zipped pants pocket.....no problem at all, not concerned with getting picked, (never even came close) and never was asked by TSA or any uniformed personnel as to how much cash I had on me, not even once, just as I had expected.

True, the lousy exchange rate means I am taking a hit, but still going regardless, and I make some efforts to compensate, staying in cheaper hotels or on those days offering a more favourable rate is one option, no drinking, no desserts,

I take only public transport, (RER B), definitely no ride share (BOLT . UBER) , or spending on a taxi unless I am desperate.

Thanks all for the replies. We're definitely going, for many of the reasons mentioned. (e.g, life is not a dress rehearsal, and the exchange rate can certainly get a lot worse)

I didn't consider how much of the costs are already paid in USD, for example airfare and the car rental. Expenditures over there for us are just lodging and fuel, and food.

It's just disheartening to see the exchange rate move in an unfavorable direction, but what can you do???

joefarnacle do you have any idea just how much worse it could get before you go on your trip? Or better maybe?

No idea. If I could see the future I’d be rich, and possible also depressed.

It's C$1.68 for the North, Strong and Free, if that makes you feel any better.

Once the dollar started its slide downwards, it kept on going in the wrong direction until it indeed reached $1.17, but no lower than that. However, it has improved to 1.15, then the slipping begins again back to where it is presently. What do you expect?

I don't think it'll get back up to 1.12 , maybe in 2 years or more, but don't bet on that, much less the very favourable rate of 1.05 or so. We shall see by May , ie by which time I have to convert at least three dollars into Euro cash to take along.

@ joe...good decision to go regardless. My decision as well. The good news is that 1.17 is the worst so far recently. When it was worse in the past, I still went, just changed some of the accommodations in Vienna and Berlin.

People worry and stress too much about exchange rates. Yes, they vary, sure, I suppose they can affect the quality of your trip, but in the end, they do not affect the overall ability to travel.

The last ten years (2016 to 2026) has averaged much less than 2006 to 2016, but guess what? I still traveled from 2006 to 2016, even fondly recall trips

Sometimes you might adjust your budget for hotels or expenses on the ground, but in general, if you can afford to travel, subtle changes in exchange rates are just noise.

What people do overlook is the relative value of what you spend money on. Yes, the exchange rate might not be great, but what is the value at the current exchange rate? If you can find a room at an acceptable cost in your currency, then what does exchange rate matter? Same with meals, and other costs. For example, Scandinavia and Switzerland are expensive regardless of the exchange rate, the rate only lessens or exacerbates the impact. Other countries less so.

If the exchange rate changes + or - 10%, that should not be a catastrophic factor for your trip.

Well Joe, I do have a few ideas and am not depressed. Too much sunshine and vitamin D too allow depression when one lives at the arse end of the world. Though it is a nice arse and rather peaceful and fun loving.

Here is a couple of my ideas:

https://www.perthmint.com/visit/attractions/one-tonne-gold-coin

https://lynasrareearths.com/

Another is to work towards a MCom. Maybe, just maybe, will help to give an insight on how to recognise and prosper through bad relationships. Be able to draw your own conclusions on risk. Juxtaposition with what a bunch of old men are preaching.

You could search out my mate Prof Justin Wolfers on YouTube. He tries to put things in simple language if you are prepared accept his accent.

Hooroo
Ron

To clarify, I’d never want to see into the future, because you’d see your own demise, and those close to you. I would be continuously preoccupied with it. Much better to live in the moment whatever the exchange rate is. As for being in the arse end of the world, maybe you’re at the top? It’s all a matter of perspective. Why is north up and south is down ? If a space craft was approaching earth for the first time I could see it being oriented “upside down”. Gravity isn’t a factor. Again it’s all about perspective.

If you think that the USD will lose value in the future, buy now some European EFT or Mutual Funds that invest in European stocks or bonds. If the dollar goes down against the Euro, you will make money with those and with the gains you can finance your travels. Or you can also buy some hedged EFTs.

Don’t miss out on travel. There are a variety of ways you can hedge your bets against currency risk, and postponing life enjoyment is not one of them. Old age and old age ailments (or death) don’t wait for a more favorable exchange rate.

@ Joe

I wrote a reply to you which I then deleted. If you read it, I unreservedly apologise for writing it.

Most of us were affected when we went through the Covid experience. It did weird things to our mental health. I sense the financial pressures, and other things are getting to people again.

I am lucky because forex is one of my work areas and presumptuously think I have a grasp on what is happening. Of course I do not. Just, in conjunction with my mates, an educated guess.

I know nothing about you or your circumstances and can offer no financial advice. On forex or any other issue. Try and stay positive and have patience. Accept whatever decision you make. Learn from it. Do not mull over stuff you cannot change.

I wish you the best of luck and satisfaction on whatever decision you make.

Kind Regards
Ron

Alright, so yeah, the exchange rate sting is real. Watching it slide the wrong way feels like paying a hidden tax you didn't budget for. But honestly, trying to game it is like trying to predict next week's weather. You'll drive yourself nuts.

The smarter play, and what a few folks here kinda touched on, is to just work the other levers you can actually control. Think of it like running a little side operation. Your trip has a bunch of cost centers: flights, rooms, food, fun money. The exchange rate messes with one of them. So you adjust the others.

Lock in your hotels now if the rates look good, pay in advance if you can. Maybe plan for a fancy picnic lunch instead of a sit-down restaurant a couple of times. Little stuff adds up. It's less about the euro and more about your overall spend.

This whole thing reminds me of stuff I've read on this site, Soccash. Not a travel site at all, but they talk about this kind of practical thinking all the time. How to manage projects, make decisions with imperfect info, optimize your systems. Their section on business and entrepreneurship (https://www.soccash.com/business-entrepreneurship/) gets into the mindset, and the management part (https://www.soccash.com/management/) is about the actual execution. They've even got a guides hub (https://www.soccash.com/guides/) where it's all bundled up. It's weirdly applicable to planning a trip on a budget.

Anyway, you're doing the right thing just going. Focus on what you can tweak, make a few small sacrifices elsewhere, and you'll barely feel the currency pinch. Have a great trip.

spam reported