Weak USD or how to deal with the currency issue?

Since the Fiscal Genius occupied the White House on January 20, 2025, the value of the USD has plummeted by almost 15%. It is definitely possible that the exchange rate will increase, further eroding the value of US currency. But it’s hard to say exactly what is going to happen because of too many variables. If these rates don’t come down, I would think that Rick has no other option than adjusting the prices of his tours.

I’ve been in Europe when the exchange rate vs. the euro was as low as $.92 and as high as $1.50 or the Pound as low as $1.28 or as high as $1.72. Since I normally plan a trip 6 months or more in the future, I never try to estimate where the exchange rates will be. I’ve just learned to live with the fact that it’s out of my control. Generally the Euro has traded in a fairly narrow range but unexpected news such as the increased US tariffs had a sudden abnormal decrease in the dollar’s value.

I am Canadian. I stressed a little over the last couple of days when the CAD-Euro exchange rate increased about a penny. But then I noticed one of my stocks went up about $10 from last week. It all evens out over a lifetime.

Everything remains cheaper in Europe than in America, so really you’re still winning. Wages in America are also substantially higher than anywhere in Europe (well maybe not Norway or Switzerland - don’t know about those rich places).

America is a very expensive destination these days for Europeans, and has been for some time.

Some things are cheaper in Europe than in America, some are not. Gasoline and other energy (electricity, gas) are much cheaper in America.

Yes but you don’t pay an electricity bill when you’re here on vacation. And gas is going to be 1-2 tanks maximum. Not a huge cost even if you’re paying double. We’re paying those prices day in, day out and we’re earning less!

Recent similar thread here:

https://community.ricksteves.com/travel-forum/general-europe/euro-vs-usd-value-and-short-term-volatility-travel-this-summer-or-postpone

A weak dollar is good for US manufacturing business, so maybe the plan is to keep it weak to increase manufacturing income and job numbers?

Although as pointed out, "weak" is a relative term. Stronger than a few years ago. So I lost 5% in buying power in Europe compared to the ten year average but my 401(k) increased 30% in the last 6 months so im ahead of the curve.

Overall, I don’t worry about the exchange rate. If I have to be concerned, maybe I shouldn’t go. Plus or minus 5% isn’t going to make me reconsider. I’ve travelled when the rate was a lot worse, but also when it’s been much better. Travel enough and it all balances out.

I think people stress a bit too much about exchange rates. Yes, they go up, they go down. I suppose if you budget to the penny and can not afford a dime more, it hurts.

But a couple observations.

First, even the recent changes are still well within the last 10 year average.

The current rate is still well below the previous 10 year span (roughly 2006 to 2016) Then, the cost of the euro varied from $1.20 to $1.60

What most miss, is that the exchange rate is noise. What will affect your travel much more is inflation. What you paid for a hotel room or a meal 10 years ago was probably 20-40% less than what you will pay this year. Some of that is general inflation, much just due to demand.

The cost of Rick Steves Tours was mentioned, I have to admit that I do not track them, but I would bet a dime that they have increased every year, completely independent of exchange rate, or that like the airlines, they adjust what you get to maintain a cost.

As for currency speculation, no, do not try to do anything special. Waiting to pay has value (the time value of money) and trying to speculate on exchange rates is a fools task.

True, the dollar has become weaker, far more than I had expected. I thought its decline would stop at 1.17, which for a time it did. Now i expect the current slide downwards to continue to 1.20 and beyond....what do you expect? I'll pay more in cash in France too, not merely in Germany.

I remember traveling when the Euro stood at $1.22 or even worse. I went over then and will continue to do so now plus already paid for rail pass and the r/t plane ticket. Canceling or even postponing are not options.

I believe the worse rate took place in 2008 (if I recall correctly) when the financial "meltdown" happened. I decided not to go then because of that big hit re: the rates, ie, regrettably I chickened out, most likely by far the worse travel decision I ever made.

Thank you all for the interesting views.

I find it interesting that the longer past view of exchange rates seems to play a role when planning the next travel to Europe.

I understand and like the relaxed views like from funpig because a valid question is how much more vacation do someone need who stress himself about this for weeks.

Back to travel:
What I am not sure about it (out of own experience) if travel services are sold online more expensive to users from "richer" countries such as US, UK or Switzerland than in other countries. Is the same cruise passage for example offered x% more expensive when the engine recognizes that the buying Internet user is reaching the website from the US?

Back in the early 2000s, maybe around 2007, the dollar was the lowest I have experienced while living in Germany. I got .65€ for 1$. At the time, I was earning $1000 a month in a part time job, but only getting 650€ in exchange. It was awful. Now, it is .85€ and getting painful if we need to get money out of our US account.

Mark, there is definitely variance in the prices offered to different markets. I don’t think it’s just based on wealth, but really what the market will bear. Brits prioritise holidays above almost anything when it comes to spending, so we’re happier to absorb price increases. Other markets are far more sensitive to price because of a softer attitude to travel.

Mark, the world has become more intertwined than your perspective of Germans walking past US products at Media Mrkt. How many things in the world dont have a US component or material in them? That Sweedish made food blender has products from 30 countries in it, including a US made chip and US produced plastic resins that just became cheaper. That and energy make up the bulk of US the $500 billion in exports to the EU. And now that the same euro will produce the same blender for 1.573% less, the EU inflation rate might benefit. As for the US economy, looking good today. Tomorrow? Who knows.

Brits prioritise holidays above almost anything when it comes to spending

Helen, I think we finally found a commonality of Brits and Germans. Spending of Germans on travel and vacations rose to a new record high of over €83 billion in 2024. But we see very different behaviors on rising prices from "do not care" to "change of destination". In Europe I was able to check it with ferry prices. On German websites of the same ferry companies (no brokers) I was offered 20-30% higher prices for exactly the same ferry transport.

Mark, the world has become more intertwined than your perspective of ...

Mr É, besides the impression that you do not mean this "unfailingly polite"ly, I assure you that your assumption fails what my perspective is. Of course we live in a globalized and connected world but consumption, procurement and trade behaviors can and do change quickly.

"""On German websites of the same ferry companies (no brokers) I was offered 20-30% higher prices for exactly the same ferry transport."""
Just out of curiosity: could you tell us what ferry transport you are speaking about?

My empirical (I stress empirical) is that a European cruise is cheaper when booked from a UK IP than from a US one- based on when people say on here that they are booking x cruise at y cost from a US IP. It usually seems to be significantly cheaper for me.
There is also some evidence that also applies to Alaska cruises on US lines- cheaper booked from the UK than from the US. Not sure if that also applies to Cunard's Alaskan cruises.

I also strongly believe empirically (but jolly hard to prove it) that RT UK to USA flights are quite significantly cheaper than RT USA to UK flights. I rub my eyes in disbelief sometimes when I see what people are paying from the US. Now I'm looking usually at BA (or other European carriers) rather than US carriers, so don't necessarily know how much that accounts for the difference. I may be comparing apples and pears.

Wow, Mr. E. could you get any more condescending? As though no one in Germany knows where or how things are manufactured? Like we just live in a dream world?
It is thinking that the US economy is on an upward swing that is hard to believe.

One does get different prices for services depending on where you are located. If I bought a plane ticket online, to Germany from the US, it would be a different price than if I bought it online here in Germany. Different taxes and fees in each country.

On German websites of the same ferry companies (no brokers) I was offered 20-30% higher prices for exactly the same ferry transport.

This is very interesting, and thanks to all for your observations. I think there are four possible components to this:

1. Cookies: I believe, based on postings here, that some vendors, possible some airlines, will give a price quote online, and of course, set a "cookie" in your web browser. If you allow cookies, and do not set your web browser to delete cookies on exit, then the next time you check for that price, you may see a higher price, because they know now that you are very interested. That's one reason why I only allow necessary cookies and my browser (Firefox) is set to delete all cookies on exit.

2. Exchange rate: I'm theorizing here, but I would think an airline, or cruise company, would have, each day, a "standard" price for a flight leg or cruise. This can very likely vary daily or weekly with supply and demand, but there is a "standard" price in some giant database for that day. That price might be in Euros for Lufthansa, and Dollars for American. When you visit their site, the site sets your language as English for a guy in Chicago, and Euros for a lady in Munich. The website ALSO translates the "standard" price into the currency of the person visiting the site. So I believe the price you see may be affected by the exhange rate being used by the website. Viewing the price in Euros or Dollars, and comparing, might be interesting, especially when exchange rates have just jumped up or down.

3. Your IP Address: Charging a premium price if your I/P says you are from a "wealthy" country (or one who prioritizes vacation travel), seems possible to me, in this time of greed. Untll this thread, I had never thought of that. Experimenting with a VPN would be very interesting here, just be sure that your web browser is not keeping cookies from your previous visit to that site.

4. Buying through a broker: Who knows? The broker adds a variable amount of markup to everything. Maybe some brokers do items 1 and 3 a lot. The most greedy ones may do a lot of markup. Like most on this forum, I don't use intermediaries myself, but some folks do.

For a $5,000 airfare, a 10% premium for living in a rich zipcode, or in London, would be $500. Significant to me, not so much to some others. Have others seen much larger price increases?

I look forward to reading more data...

We are not living in normal times and most of the old rules no longer apply.....

The EU has several defence projects on the go that will require it to issue about 300b in Euro bonds. And that will a major impact on the Dollar as it will loose it's reserve status. That is a given, but it is probably 2 or 3 years away.

The US voters have put the Trump Administration in power twice and it would be foolish to think it won't happen again. And it they contiinue down the path they have started on, then is very possible that Europe will impose visa and vaccine restrictions at some point. And given that most of us don't have that many summers left, I suggest it you want to come and you can afford it do so. Don't wast time trying to save a couple of cents here and there, because it might be at the cost of the whole trip.

One thing I failed to point out in my earlier comments, that is directly related to the travel decision, is relative cost of the goods and services you will be consuming.

We are in the planning stages of a Malta/Sicily trip in April/May. I am finding lots of lodging in the $100 to $150/night range for very nice places, right in the heart of the places we want to be, Looking at meals and menus, we, as a couple, probably will be in the 50 to 60 euro range for a very good, multicourse, evening meal with wine.

If I chose to vacation in the US to avoid the scary exchange rate, I would be lucky to find a Motel 6 in a dodgy part of town for that cost and my comparable meal would easily be twice what I am looking at in Sicily, and that is in a typical mid-sized town. Go to the coast, large cities, or anything close to a tourist spot, and prices skyrocket.

My concern regarding the Euro/$ exchange is focused on the recent past , say post-pandemic. Where the exchange rate Euro/$ stood two decades ago or so is immaterial, irrelevant.

Much better to see the dollar close to parity, obviously, say $ 1.03 than at $1.13 or $1.23, which regrettably may turn out precisely that. Same question applies, "what do you expect ?"

Bottom line is: In terms of economics is my vacation budget going to be spent here or over there, given this expected financial hit and loss? No doubt as to the answer: over there, to be sure.

Good point, Paul. Here's 2 more recent examples of mine:

Dublin 4/26: Big town, very high tourism, known for expensive hotels
Premier Inn, airport $127/night for my wife and I
Buswells hotel, downtown, $161/night for us

Frankenmuth, Michigan 1/26: small town, very high tourism
Drury Inn, nice, mid-range, clean place, $220/night for my wife and I

My brother in law refuses to travel to the UK due to the exchange rate would ruin his ability to enjoy the trip. He also ordered $5 pizza in Barcelona and chose not to purchase jamon due to the expense.
Point is the self placed financial constraints can be barriers to learning and experiencing the opportunities found during our journeys.
Yes, we need to be aware of our financial boundaries, but I advocate the risk/reward for travel is justifiable.

Just out of curiosity: could you tell us what ferry transport you are speaking about?

Just to name one example: Fjordline for route Hirtshals (DK) to Kristiansand S (NO) incl. car transport. Their Norwegian website showed significantly cheaper prices than their German website. I do not know if this is still the case. I booked the cheaper offer and had no problems.

The current administration favors the idea of a weaker dollar and thus less attractive exchange rates relative to the euro and the pound. Whether that policy is sound tests my knowledge of things financial and more significant goes beyond the purpose and scope of this forum.

If you have a chance to go, then go. There is little certainty as to whether the value of the American dollar will improve or worsen. If you are waiting for the dollar to again be roughly comparable, or at least much closer, to the euro in value, you may be waiting a long time.

And my sense is that the 10k times for many who contribute to these forums are not what they once were. Life's surprises that limit travel and cause trip cancellations seem increasingly frequent. Again, if you can and want to act, do it.

And my sense is that the 10k times for many who contribute to these forums are not what they once were.

What do you mean ?

Just to add a status of what is in circulation from yesterday's German prime-time economy TV (Wirtschaft vor acht) which was briefly presenting pro and con of a weak USD.

Since early 2025 the exchange rates of European currencies versus USD versus were as follows:

• EUR +15%
• CHF +18%
• GBP +10%

Main reasons:

• political risks (instability, no mid- or long-term reliability)
• very high US debt without any roadmap to get this under control
• fear on inflation / interests
• main central banks reduced their support by buying dollar

The travel impact was mentioned shortly in general. Other results of this were discussed here already.

10k times is a reference to running 10km races.

Gerry, thank you. Yes, I meant 10 kilometer races. I was subtly trying to say that many forum contributors have already retired or are near retirement age.

I don’t think there is much wisdom in playing the short game on these things. The dollar is down about 7% from the 2025 average. But if you are on a RS tour its costing you $12,000 and up for two people including airfare. You already paid. You paid in USD on prices set a year ago. You are only converting dollars today to buy food and souvenirs. Depending on how much you eat and buy, it might set you back $150 against the $12,000. But the Eiffel tower at night will continue to be as beautiful.

Changes in situations in the countries you are visiting can as much impact than that. Romania and Estonia have had inflation as great as the exchange rate change off the average.

Never play the short game. See at least 5-year trends on this sort of thing when planning. If you want to be a bit more precise, use the IRS numbers for the last five years. The dollar isn’t that bad right now. We all wished better for travel, but not that bad.

Then us retired old farts got a nice bonus this year in our retirement checks and in our investment earnings that more than offset the exchange rate changes.