dollar and the euro

[Joyce]

Just returned from Italy and had a GREAT time. The weather was perfect and the travel group fun! The only downer was the terrible weakness of the dollar. For example, it cost $256 for a $200 ATM withdrawal. When we travelled to the Riviera 3 years ago, the exchange was almost even.

[Jimster]

Do you want to hear that you were lucky! Your price is about $125 per hundred. It was at $135 per hundred. It has come down. I stayed out of Europe during that time. Money values do change!! In 2001 the Euro was actually cheaper than the dollar.

Please refrain from any political comments.

[Dave M]

Originally Posted by Joyce

it cost $256 for a $200 ATM withdrawal.

I assume you mean €200, rather than $200.

[Joyce]

You are absolutely right. Thanks for catching that error. In any case, Italy was expensive but fun!!

[TomCayman]

Originally Posted by Jimster

Do you want to hear that you were lucky! Your price is about $125 per hundred. It was at $135 per hundred. It has come down. I stayed out of Europe during that time. Money values do change!! In 2001 the Euro was actually cheaper than the dollar.

Please refrain from any political comments.

Yup... around that time I went to Paris in November and bought a lightweight designer suit in the sales (not much call for lightweight suits in Paris in November).... 500 Euros... but at 0.85 that was US$425.....trust me, it was a steal

[dougp26364]

I could've been worse. You might have been in the UK where the exchange rate, last time I looked (about a month ago) was $1.77 = 1 pound sterling.

[Jimster]

Just got back from the UK and the best rate I got (using atms and the inter bank rate) was $1.78.

[Carolinian]

And you have to add the price increases that came with the change to the euro. Many businesses used the currency change as an opportunity to raise prices. I was in Germany on the change day, and the increases were quite obvious on many things. Greece and Portugal were cheap destinations when they used the drachma and escudo, but are much less so after the change to the euro. Despite its marginal convenience, the price increases that went with it have made the euro a huge negative for tourism to europe.

Right now, eastern Europe is comparably cheap, but these countries are required to adopt the euro in the next few years as part of their acccession agreements with the EU. Slovenia will be the first, next year. If you want to travel to eastern Europe while it is still relatively cheap, go now before tourists get clobbered by the price increases that will certainly come with the change to the euro.

[Keitht]

Sneaky so-and-so's in some of the Turkish resorts most popular with the Brits actually price the menus in £ not Turkish Lira. That way the tourist gets stung without realising it. Earlier this year the exchange rate was around 2.2Tl to the £ and it is now over 2.5Tl to the £. I would lay money on the fact that the sterling prices on the menus haven't dropped.

[scotlass]

Anyone who has checked lately has seen both the euro and the GBP go up and up, just in time for the tourist season.

[fnewman]

Here is a good web site for tracking exchange rates...

http://federalreserve.gov/releases/h10/Update/

[Hoc]

Think of it this way: It could have been worse. When I was in Paris in summer 2004, it was $150 to €100. So, €200 would have cost you $300. You saved $44 per €200 you withdrew.

BTW, you can thank France and the Netherlands for the weak Euro. Last year, they made some political choices that brought the continued progress of the EU and the Euro into question. So, the Euro has fallen substantially over the last year or so.

[nkosi278]

Carolinian is so right...I was in Berlin on "Euro day" and could not believe how in a matter of hours prices were up and up....how I yearn for the fine tuning of small item pricing using the Pfennig!

It was just the same in UK when they went metric - in no time the little things (like candy bars) which had been 6 old pence became 5 or 6 new pence (and that was a factor of 2 1/2!!)

I look forward to NON-Euro pricing this fall when we travel in Slovenia, Croatia, Hungary and Slovakia......one last trip before Euro-hoisting!!

nkosi

[alanmj]

Originally Posted by Hoc

BTW, you can thank France and the Netherlands for the weak Euro. Last year, they made some political choices that brought the continued progress of the EU and the Euro into question. So, the Euro has fallen substantially over the last year or so.

I don't know which virtual reality universe you're living in, but in this universe the Euro has strengthened continuously over the last 7 months from $1.16 in Nov 05 to $1.27 today. See:
http://finance.yahoo.com/currency/co...submit=Convert

Yes indeed, 19 months ago the Euro spiked at $1.35, an all-time high, but that was due to an unprecedented and unsustainable rise over 3 months from $1.21. This latest rise is based more on reality than currency speculation.

Cross-correlation of currencies shows that - apart from the Zim dollar - all currencies are strengthening against the US$, particularly my very own C$ which is now at a lovely $0.89 cf. $0.79 a year ago and $0.73 two years ago. So it's the political choices made in the US that are having global currency effects and are bringing into question the dominance of the US$ in currency trading.

Perhaps your point is though that the political choices made in the Netherlands and France have resulted in a Euro that is not as strong as it can/should be. That is possibly so, but it is conjecture. A clear fallacy is your last sentence.

Edited to add that the projections for the US$/Euro exchange rate are for a continuing weaker dollar. See, for example,
http://fx.sauder.ubc.ca/trends.php?pair=EURUSD&type=tr
and in fact the US$ is projected to weaken against all other major currencies.