Today, the dollar-to-euro exchange rate hit a 12-year low against other world currencies, meaning that those dollars will go farther when you travel to Italy. Currently at $1.05 to 1.00€, the exchange rate is expected to drop even further, with some analysts predicting a 1:1 exchange as soon as next month. It’s probably going to stay that way for a while, too.
“Most experts expect that the dollar will continue to gain strength throughout the year. “Currencies move in 5- to 7-year cycles. We are just beginning year 2 of what could be a multiyear rally. The only way the euro could strengthen is if the U.S. economy slows down and the Fed decides not to raise interest rates in the United States,” JP Morgan banker Piers Cornelius told the San Francisco Gate.
That’s not enough to fund your travel and accommodations — but it is enough to mean you might upgrade either or both, and you can definitely plan to get more for the money you do spend on dining, tours, and souvenirs.
How much more? Experts estimate about 10%. Here are a few tips to get the most out of that 10% advantage:
Check Now: Use an online exchange tracker like www.x-rates.com to get the latest information about the best available rates. Just because the dollar is strong today doesn’t mean something won’t change tomorrow. Do your homework.
Book Now: Plan your trip and pay for it while the rates remain favorable to the dollar. Just think — no last-minute dithering or disappointment! Booking ahead also means you can plot out other ways to save money, too, such as investigating a gem of a hotel that’s not smack-dab in a city center.
Buy Now: If you’ve already got a trip planned and purchased, get euros before you go; many experts steer travelers away from buying euros in advance — after all, almost every airport has an ATM, now — but given the current dollar rate, having enough euros for snacks, a taxi, and tips upon arrival makes sense. How to do that? Most major banks have currency exchange services and offer packages for purchase; see, for example, this Bank ofAmerica page. If you order online by 2:00 p.m., you can pick up your currency at a branch the following day. There are also services online offering currency exchange packages. Wells Fargo is a trusted source, and AAA is, too.
Charge Now: Use a credit card with no foreign-transaction fees, and use it as often as you can while overseas; you’ll benefit from the dollar’s strength. Frequent travelers will want to be sure and use cards that provide air miles or resort points, of course — more credit for next year’s trip to Italy.
Try Now: As noted, the exchange-rate differential isn’t going to make Prada possible if you’ve got a polyester budget — but it’s enough to make it possible for you to try a suite instead of a double, sample the secondi along with the primi when you dine out, and contemplate sending some good Barolo wine home.
Something to keep in mind is that a good exchange rate for us means a weaker euro for Italians—try not to boast loudly about how much you’re getting for your money. Although the citizens wherever you visit appreciate your dollars and custom, they don’t need to be reminded that their trip to the USA may have to wait a year or two.
— Bethanne Patrick
Photo by Mark Hodson, flickr.com