Value of dollar declining

Some of us, myself included, like to buy some European currency (euros, pounds, whatever) before we leave. This way, I'm set for a couple days after I arrive and don't have to worry about finding an ATM as soon as I get off the plane. Buying euros in the U.S. is more expensive than using an ATM, but it's worth it to me to have some cash on hand.

@ Sarah, I also like to have some foreign currency on hand for travelling, so that I can pay for meals, Taxi or whatever until I get settled. Fortunately that's a very easy process in this area, as there's a four-currency ATM that dispenses Canadian $, US $, Euros and Pounds Sterling. Cheers!

Lynette: Just came back from a two week trip to London and Lisbon. Get a debit card from your bank if you don't have one. Put some money in your account and then use the card for makinig ATM withdrawals in europe. We got the best rates that way. Don't take cash. Buying euros in the US is typically more expensive. We looked into it with our bank. We received good rates with ATM withdrawals. Not all banks in europe will change money. ATMs are the way to go. Don't make life hard for yourself on vacation. ATMs are all over the place.
Enjoy your vacation.

I'm getting anxious that the exchange rate is getting worse and worse, too. But the rate that your bank will give you, plus whatever fees you have to pay, will take up whatever difference there is in the exchange rate between now and then, if there is one. There's lots that can happen between now and when you take your trip that can effect the rate. The fed could lower interest rates, Portugal could go belly-up, who knows.

Just read that the euro (vs the dollar) is up 10.97% since January 1st; 14.24% since May 1st a year ago. What goes up must come down? Eventually. Maybe. Use the ATM's.

Thanks for your advice. Just trying to make a wise decision. We will stick with our plan to use ATMs and hope for the best for economic conditions beyond our control.

Lynette, It will likely cost you more to purchase Euro's from your local Bank, rather than getting the better "interbank" rate that's provided at ATM's. One point to note is that your travel funds must usually be in a chequing account with a four-digit PIN. I would highly recommend packing a second ATM card in case there are any problems with the primary card. I've had that happen! There's no way to accurately predict where the exchange rates will be at the time of travel, so buying Euro's now may actually be more expensive. Also, it probably wouldn't be a good idea to travel with a huge quantity of cash. Happy travels!

It isn't hoping for the best. It is a question of analysis of risk and which way you want to gamble. First, if you purchases Euro in the US you will pay a premium of 5 to 10% which means that the dollar will need to decline by another 5 to 10% before you have any chance of breaking even. Then you need to add a small additional cost of the interest lost for having the money tied up in Euro while waiting for the dollar to decline. For most people, like you and I, it is a sucker play. Easy to lose but hard to win. There are easier places in your travel budget to save a few dollars that you might saved by buying Euro in the US.

As someone who goes to Europe every summer and does not get any European currency in the US, I have never had to worry about finding an ATM machine at my arrival airport. They are all over the place. I choose to keep my exchange rate costs to a minimum so I can spend that money doing other things I like rather than giving it to some big bank.

I just wanted to add that I actually got a better rate from my local bank- by quite a lot- than exchanging money or using Atm's when I was in Paris. You also might look into the Chip and Pin card which my friend used, but be careful, most local markets do not take cards and there was an instance where she didn't have enough cash for the day. Contrary to what most travelers in this site have said, I used nearly all cash in my money belt and hidden in various clothing and luggage, and never experienced a single problem. I paid for large purchases with my visa.

Lynette, when are you going? Looking at the rates now, they are just about the same as they were during my trip last October. If your bank does not offer favourable foreign transaction fees and if have time, open a bank account at a bank like Ally or a local credit union (you're not limited to those two, but that's what I can think of off the top of my head). My credit union charged only 1% foreign transaction fee, which is a much better deal than buying Euros here. With places like Travelex or Wells Fargo, you are looking at at least a 5% mark-up on top of the exchange value, so even if the exchange rate fluctuates, ATMs are a better value.

Would be very interested to know the rate your bank gave you given that the best bank rate is generally a five percent markup and the worse for debit card fees is about 3%, you would have to have a bank exchanging near the interbank rate which is hard to believe. Like to see the numbers supporting your statement.

Quantitative Easing 2 runs out of money in June. The effort to buy debt and keep interest rates low also has the effect of reducing the attractiveness of our currency. It will be interesting to see what happens when the fed stops intervening to keep rates (and our currency) down. Probably nothing drastic until there is more hope we'll solve our budget problems.

I check the exchange rates daily. Since you first posted this the Dollar has been gaining and is at the same rate as when I went over a year ago.
It goes up and down all the time.

Why do I get the feeling that Carole is yelling at us and is afraid we will miss her postings??

Today the Euro is $1.4040. A year ago, it was $1.2419. Rather than the same rate, I'd say the Euro has gained 13% vs the dollar in a year.

It is not uncommon for my European colleagues to fly to NYC with empty suitcases and come back with new wardrobes. 3 in my office have made a shopping trip to New York so far this year.

Thomas, shopping trips to NY have always been very popular. That has little to do with the exchange rate. Fashion in Vienna just isn't the same as fashion in NY ....

I don't know why my posts are doing that sometimes. Let's see if this one is normal. Nope not yelling....:)

It was 1.37 March 3, 2010, when I went to The Netherlands to take delivery of a puppy. I'm showing 1.4076 for the last trade. Okay 2.7% difference.

I'll agree that shopping trips to New York are always popular. But the exchange rates have definitely made them even more popular. At least judging from my coworkers delighted screams of "oh my gosh! Clothing in America is sooo cheap right now!" And I confess it is true compared to clothing prices in Vienna. I also save most of my business-wear purchases for when I'm back in the States.