Exchanging for Euros early?

There is no problem with customs unless you are carrying $10,000.00 or more in cash with you, and even that isn't illegal -- you just have to report it to customs.

Your idea, however, of buying a bunch of Euros so far in advance of your trip would only be a good idea if you were sure that the Dollar would drop considerably before your trip. It may drop a little, but will it drop so much that you would save a lot of money by buying Euros now? Even the currency "experts" can't tell you that for sure.

Also, you will not get as good a rate by buying Euros from a bank in US, as you will by withdrawing from an ATM in Europe. Example: say the Euro is worth $1.50 now (the interbank rate). If you buy now from a US bank, you will pay something like $1.56 at the bank. By contrast, if you were in Europe and withdrew from an ATM, the rate would be something like probably $1.52.

You're certainly not the first to think about it - have a quick search in the archives, the question gets asked at least once a fortnight.

The main problems are:

1) The currency market is nowhere nearly as predictable as people in internet forums appear to think. So it really isn't certain that the dollar will drop.

2) Even factoring ATM/CC fees it is almost certainly more expensive to buy euros in the US (to the tune of at least 5%.) So not only do you need the value of the dollar to drop it needs to drop more than the money you loose buying in the US. For instance even if the euro gains 2% after you buy your stash you will still loose money if you bought at a 5% markup.

3) "Opportunity cost:" as soon as you cash into euros and stuff them in your mattress that money is locked. If you left it as USD in the bank it is earning you interest. So assuming you manage to come out ahead on the currency swing and cover the extra cost of buying at a premium in the US you still may end up behind the game once you factor in lost interest.

4) As you said, the hassle of carrying thousand of euros in cash.

Just though of one positive. Although you would need to be very lucky to come out ahead financially with your plan a lot of poster here seem nervous about travelling outside the US and are comforted by having thing in their hands before they leave.

If you are one of those nervous travellers you might be willing to pay a premium to have your spending money in had before you leave. No worrying about finding money when you arrive and you get the chance to familiarise yourself with the notes in your own home. Not a premium I'd be willing to pay but each to their own.

Yes, this question gets asked frequently and I asked it a while ago: http://www.ricksteves.com/graffiti/helpline/index.cfm/rurl/topic/37784/is-it-ever-worth-buying-euros-ahead-of-time.html.
I have come to the conclusion that it is not a good idea based on all the information and discussion.

I have to agree with the advice not to try to buy up Euro in advance, although I'm not so sure I necessarily agree with all the reasons. You don't really know what the market will do. A few years ago, I bought Dauer-Spezial tickets at $1.40/Euro several month before going over; when I finally got there is was more like $1.30/Euro.

Although I have some sources for less, most major US banks will charge you at least 3% over the Interbank rate for currency withdrawal over there. I get my Euro over there for 0% to 1% over the rate. If you buy them here, before you go over, you will pay AT LEAST 5% over.

On the other hand, most theft/scams occur at the ATMs over there, so if you bring cash, you have less chance of that.

On the other hand, most theft/scams occur at the ATMs over there, so if you bring cash, you have less chance of that.

Not doubting your info but I wonder if you have any figures for this? It's an idea that crops up very often on this board and is something "everyone" seems to know but I've never seen any numbers to back this up. I wonder exactly what the increased risk really is?

Yes, Peter, and has anyone on this board ever had any personal experience of this, and I stress the "personal", not the cousin of the baby-sitter's best friend's tale.

Darrell,
I agree with Peter on the problems with exchanging dollars for euro.
If you want to save on the exchange you might want to shop for a better credit card or ATM card, see http://flyerguide.com/wiki/index.php/Credit/Debit/ATM_Cards_and_Foreign_Exchange