Not so great for those who live there, but the economic situation in Europe promises some of the best exchange rates in over a decade. With the recent elections in Greece….in which the anti-austerity party has an overwhelming mandate….you can see the writing on the wall. A country already awash in debt is about to go even farther down the path of disaster. By the way, this might be a good time to visit Greece….just be sure to bring plenty of Euros with you.
Upcoming elections elsewhere in Europe are also leaning in that direction, so the Euro is unlikely to go anywhere but down compared to currencies such as the U.S. dollar.
According to the European Central Bank, the exchange rate today is that $1 will buy.90 euros, a rate that has not been seen since 2002. Last year at this time, the exchange rate was such that $1 U.S. bought only .73 euros. We suspect it may reach parity by fall.
To put that in perspective, if your trip to Europe costs 2,000 euros, you would have spent $2600 last year compared to a little over $2200 this year. And, that is likely to get even better as the year goes on.
Another plus, although not yet a reality, is that lower fuel prices will eventually lead to a leveling-off of airfare costs. It is unlikely that fares will come down, since airlines usually buy fuel on the futures market and have costs already locked in, but at least we don’t have to worry about them going up.