Europe Currency Values, Cruise Strategies, etc.?

[TLCOhio]

Lots has been happening with the slide downward for currency values in Europe. The euro has dropped from $1.43 on Dec. 31, 2009 to less than $1.20 late yesterday.

 

The Wall Street Journal showed late yesterday the pound at $1.448 and the euro dropping to $1.197. For cruisers this summer, maybe this is good news, but we've already paid for most of costs in advance when the value of the euro, pound and dollar were much different. As the pound and euro moved down in the past six months, what you can buy in those countries have improved. This is an advantage for using your credit card versus buying too much European currency ahead with higher conversion charges. I'm glad I didn't buy a bunch of Europe currencies three months ago. We'll use mostly the credit card and ATM's in Denmark and Norway.

 

From Bloomberg News/Business Week today, they have this headline: "Euro Tumbles on Debt-Crisis Concern, Touching Lowest Since 2006" with these highlights: "The euro tumbled for a second week against the dollar, falling to its lowest level in more than four years as concern that Europe’s debt crisis is spreading pushed investors to the safest currencies. Europe’s shared currency plunged below $1.20 for the first time since March 2006."

 

From the Daily Mail in London, they have this headline: "Euro falls to four-year low against the dollar" with these highlights: "The euro today fell to a new four-year low against the dollar when French Prime Minister Francois Fillon spooked the markets after suggesting the weakening euro was 'good news'. Mr Fillon said he was not concerned by the current level of the euro and that he saw only 'good news' in parity between the euro and the dollar. Fears over European banks, poor results from the US jobs market and talk of a 'Greek-style' debt crisis in Hungary drove down global stocks and sent the euro tumbling."

 

From the Washington Post this morning, they have this headline: "German businesses could steer the country out of the eurozone" with these highlights: "With the euro fighting a crisis that continues to push its value lower, that question about the willingness of German taxpayers and businesses to stand behind economically weaker nations with which they share the euro as a currency could determine whether the continent's decade-old monetary union survives its recent shock or begins to tatter." Lots of interesting history, details and background in this story.

 

Full Stories:

http://www.businessweek.com/news/2010-06-05/euro-tumbles-on-debt-crisis-concern-touching-lowest-since-2006.html

http://www.washingtonpost.com/wp-dyn/content/article/2010/06/04/AR2010060404815.html?hpid=topnews

http://www.dailymail.co.uk/money/article-1284174/Euro-frailty-good-news-says-French-PM.html

 

Added reactions on how low things will go and/or other ideas and suggestions? THANKS! Terry in Ohio

[wripro]

If I book a cruise the last thing I want to do is consider strategies. It's a vacation, not a war plan. Whatever the exchange rate we have two options, pay or don't pay. Right now it's in our favor, last year it wasn't. There will always be a cycle.

[ging466]

Terry

 

I thought that I over-think things but u take the cake:D

 

In the scheme of things, u pay US$ for your cruise and your airfare which is the largest component of your trip. I don't understand why u r so worried about Euros/Pounds or whatever when it would be such a small amount in comparison to your total outlay?

 

It's just like wripro says "It's a vacation, not a war plan".

 

I'm particularly interested in exchange rates and I chart several currencies against the Aussie Dollar, let me say that there is NO strategy...if the economists can't even get it right, how are u going to do it!:)

 

Just go with the flow, buy today or wait and see tomorrow!

 

Cheers

Jennifer

[Goldens4]

wripro and Jennifer, you hit the nail on the head. Enough! This is a vacation not planning D-Day. And, since the anniversary of D-Day is tomorrow, God Bless all the souls who gave their lives so valiantly for all our freedom.

[ging466]

God Bless all the souls who gave their lives so valiantly for all our freedom.

 

Ditto, Marcie:)

[dusababy]

It is my fervent hope that soon, Terry will be enjoying his long awaited, well planned voyage.

[flag fan]

OP, I don't blame you for considering exchange rates when planning a vacation. These rates have a major effect on the tourism industries in North America and Europe with tourism increases following the favorable rates (which, I think, is one of the reasons a lot of cruise lines sent more ships to Europe from North America during the past two year).

 

In fact I talked to my Travel Agent about pre-paying my Paris hotel earlier this year for a trip in July. She said there was no advantage to it (I didn't tell her specifically that I was thinking about the favorable exchange rates at the time I asked). Well, I didn't pay, and its just as well as rates have improved for the dollar vs. the euro since then. The lesson for me was you can't predict these things--no one predicted the Iceland volcano or the Gulf oil spill, both of which could have a major effect on European and American economies and currency, but, of course, neither could have been predicted.

 

The bottom line for me is to not worry about exchange rates--they are too unpredictable.

[gdlamberth]

FWIW, we're on the same cruise as Terry but we're staying for a week post cruise. Rental car, farmhouse in Jutland and beachhouse in Sweden will all be paid with the (currently) stronger dollar. When I look back at exchange rates in November when we started booking this cruise and the post cruise stuff we'll be saving about 15-20% on our post cruise. I, sort of, look at that as a bonus...not something to plan for. When my wife was activated and sent to Germany for a year in 2008 we decided to take advantage and do a land visit to Germany, France, Netherlands. Euro was about $1.30 when we started planning but was nearly $1.60 when we were actually visiting. Didn't change any of our plans just viewed it as "stuff happens:p."

 

Greg

[Keith1010]

Terry, I said this on another board. Thank you for sharing this information. For those who don't care about it they don't have to read it. But for those who do, you provided some useful information and some sites to go to for more.

 

I have read your post two times now. Once on this board and once on one other board. Nowhere did I read into this that you were overanalyzing the situation, not that you were worried about this or anything close to this.

 

What I read was that you were just trying to take the time to provide some information to those who care. What I got from this is just some interesting information for those that are traveling to Europe this summer as well as in your situation that you lucked out by not purchasing the Euros in advance.

 

For those traveling to Europe this summer and who want to make some purchases it is nice to see the Euro down a bit. I remember a couple of years ago when the Pound was about 1 to 2 for the USA dollar and am glad to see that has come down a bit. And of course I remember when the Euro first came out and the dollar was worth more than the Euro.

 

For the goodness of the World economy I certainly do not want to see a major devaluation of the Euro relative to an economic meltdown but I hope we can eventually see the strenghtening of the dollar so that the exchange rate is improved to the Euro and to the British Pound.

 

Again, all I read into it was someone just trying to provide some good information to others.

 

For us, we normally just get our currency from the ATM when we arrive in another country. The only exception is if we need the money sooner rather than later and can't get to an ATM. We also use our credit card for most purchases. When the exchanges rates are highly unfavorable we do not make any large purchases abroad.

 

Thanks again.

 

Keith

[TheFerret]

I read Terry's post and thought "Cool! Now I can buy more stuff next week when I'm there!"

 

I'm not wealthy enough for the exchange rate not to make a difference.

[ging466]

When my wife was activated and sent to Germany for a year in 2008

 

Hi Greg

 

What does this mean? I must say I had a very odd picture in my mind when I read this so I just had to ask u :) ...sorry if it's blatantly obvious to everyone else...just remember I'm down under!

 

Cheers

Jennifer

[gdlamberth]

Jennifer,

My wife is a Navy Reservist. She was called up on active duty for a year to be part of a Navy Medical Detachment supporting the Army Hospital in Landstuhl Germany. So while she was there for a year the kids and I scheduled a trip to visit and she took some time off and we were able to do some sight seeing.

 

Greg

[ging466]

Jennifer, My wife is a Navy Reservist. She was called up on active duty for a year to be part of a Navy Medical Detachment supporting the Army Hospital in Landstuhl Germany. So while she was there for a year the kids and I scheduled a trip to visit and she took some time off and we were able to do some sight seeing. Greg

 

Thankx Greg....now I get it :o

[AllisonJames]

Thank you for this very useful information and I am sorry that some people did not think it was worthwhile. I am far from wealthy and why not get the best price when you possibly can? It's those type of strategies that enable me, a middle-class individual with a daughter heading to college, to even be able to consider a Silversea cruise. I have a question regarding the use of credit cards such as American Express and exchange rates. I recently used my Amex in Barbados for a snorkeling trip that cost $200 and the charge came through on my statement as $208. Since I thought the EC dollar was stable I did not quite understand why there was such a difference, we travel to the Caribbean often and have never had that happen before. We fortunately did not use our credit card a lot on that trip but if you charge thousands of dollars that could really add up! Can anyone comment? Thanks so much!

[Keith1010]

Thank you for this very useful information and I am sorry that some people did not think it was worthwhile. I am far from wealthy and why not get the best price when you possibly can? It's those type of strategies that enable me, a middle-class individual with a daughter heading to college, to even be able to consider a Silversea cruise. I have a question regarding the use of credit cards such as American Express and exchange rates. I recently used my Amex in Barbados for a snorkeling trip that cost $200 and the charge came through on my statement as $208. Since I thought the EC dollar was stable I did not quite understand why there was such a difference, we travel to the Caribbean often and have never had that happen before. We fortunately did not use our credit card a lot on that trip but if you charge thousands of dollars that could really add up! Can anyone comment? Thanks so much!

 

When you use your credit card outside the USA you will encounter two cost variables. The first is the exchange rate between the USA currency and the rate of the other country. The second is a foreign transaction fee that almost all of the credit card companies add to the transaction. It varies but is usually around another 2 to 3 percent of the purchase.

 

When we travel outside the USA I put my credit card purchase on a Capital One Credit Card that I mainly use for our international rather than domestic purchases because they are one of the only credit card companies that do not add on the added international transaction fee.

 

Keith

[gdlamberth]

I posted this link on another thread; and it's clearly not the only one of its kind, but I use it to see what exchange rate I'll be facing. The graphics does let you see historical traends also. If anyone is interested.

Greg

 

http://www.xe.com/ucc/

[TLCOhio]

I read Terry's post and thought "Cool! Now I can buy more stuff next week when I'm there!" I'm not wealthy enough for the exchange rate not to make a difference.

 

YES, TheFerret has figure it ALL out in my plan. I'm trying to encourage folks to spends lots and lots more in Europe! It's a secret plan to help boost the economy in Europe.

 

Terry, I said this on another board. Thank you for sharing this information. For those who don't care about it they don't have to read it. But for those who do, you provided some useful information and some sites to go to for more. I have read your post two times now. Nowhere did I read into this that you were overanalyzing the situation, not that you were worried about this or anything close to this. What I read was that you were just trying to take the time to provide some information to those who care. What I got from this is just some interesting information for those that are traveling to Europe this summer as well as in your situation that you lucked out by not purchasing the Euros in advance. For those traveling to Europe this summer and who want to make some purchases it is nice to see the Euro down a bit. For the goodness of the World economy I certainly do not want to see a major devaluation of the Euro relative to an economic meltdown but I hope we can eventually see the strenghtening of the dollar so that the exchange rate is improved to the Euro and to the British Pound. Again, all I read into it was someone just trying to provide some good information to others. Thanks again. Keith

 

Actually, Keith has nailed it 100% on my interests and motivations. Just sharing info! Having visit Europe in late July 2008 for our Baltics cruise when the euro was near $1.60 and the pound at $2, these lowering currency value levels are very interesting. When doing, as Greg plans, a long post or pre cruise ground stay in Europe, these cost factors are important. Some are wealthy enough, not to worry as the currency values go up and down. Others are not so lucky. Some like to do lots of shopping at certain ports. I'm more interested in taking pictures, not buying much locally. BUT, my wife likes to buy things. She's always asking what that costs in USA value. I'll know and be on top of those things. She wants specifics, not just my rant of "that costs too much, wait later and we can buy it cheaper". She's on to my tricks to slower her buying interests. Don't worry, wripro and ging466, I'm not suffering from high blood pressure over these issues. When checked at my annual medical physical last month, my blood pressure was 110/60. Doing fine and looking forward to this cruise. Some of us just like to research and plan for such cruises. Others have different approaches and travel styles. Different strokes for different folks! And, I have a few older pounds and euros, shown below, that I'll try to spend there on this cruise before their value shrinks even more.

 

THANKS, Keith, for getting it and understanding fully! Enjoy! Terry in Ohio

 

[WesW]

Greg, off topic but just wanted to say thanks to your wife for her service (in 2008..bet she was extrarodinarily busy) and for her family's (your) support at the military's premier medical facility for our Iraq/Afghanistan war wounded in Europe (Landstuhl--know it (and Fisher Houses) quite well).

[gdlamberth]

Wes,

My wife's an Occupational Therapist so she deals with rehab issues. Since most US troops only spent 3-4 days there before being Evac'd to the US she mostly worked with Coalition Forces troops (Romanians, Fijians, Poles, and Danes) as they all had extended stays at Landstuhl. On two of my visits I spent some time working in the "Chaplain's Attic" and it was truly wonderful to see all the items being donated by individuals and various organizations back home for our troops.

Greg

[TheFerret]

YES, TheFerret has figure it ALL out in my plan. I'm trying to encourage folks to spends lots and lots more in Europe! It's a secret plan to help boost the economy in Europe

 

No, when the exchange rate is favorable I get to spend less and get more!

 

That helps my economy! :D:D

[CruisinGerman]

Dear friends:

 

Greetings live from the Silver Spirit.

 

One interesting point I've noticed in the last few months is that while, historically, it has been cheaper to book and reserve cruises with U.S. travel agents in dollars versus the prices we are offered here in Europe, lately that trend has reversed.

 

A Silversea cruise is now cheaper for us in euros than in dollars, and this analysis also holds true for several mass market lines such as RCCL.

 

If you read the headlines posted by the original poster, you would think we were on the verge of the end of the world. The crisis is very serious here, but I do feel the headlines are a bit exaggerated. Everything that starts in the United States (and this crisis did start in the United States) always moves over to Europe and other parts of the world, and it is now our turn to feel the debt crisis and liquidity crisis. A major part of the debt crisis is due to speculation in trading in derivatives, but since that is now the way the markets trade, nations will have to work their way around that situation.

 

We have an expression here -- when the U.S. sneezes, Europe catches a cold. That is what is happening now but we will come out of it -- just might take a little longer than originally expected.

 

Back in the United States, the state of California seems to go bankrupt every four years or so -- and when we read those headlines over here we also get the impression that the world is coming to an end.

 

While from a cruise passenger or traveler's point of view, a stronger dollar means buying more on their trip to Europe, a stronger dollar in the long run is not good for your country, because the strong currency will make it harder to sell your goods and services both in the U.S. and other countries, while a weaker euro makes it easier for the Europeans -- especially the Germans -- to start flooding the markets with their goods, at the cost of American jobs.

 

Please don't hesitate to ask anything about the Spirit, although I imagine we will have to start another thread.

 

Kind regards,

 

Gunther and Uta

[olwagner]

Over the long term (read: about a decade), the Big Mac index (don't laugh) works quite well, and it is currently predicting an exchange rate of 1.06 Dollars per euro, so chances are that the value of the Euro will continue to fall (unless inflation differential quicks in, but that's another story).

 

Over shorter periods, your guess is as good as mine and - assuming the exchange rate follows a random walk (and no, that's not a term used to descibe a drunk guy - don't laugh) - if your cruise is to take place in less than a decade, it would be fair to assume that the exchange rate then will be the same as it is now. Again, that does not mean that it will be but since we can not predict where it will be - or even in which direction it will move over short periods -, that is our best guess.

[Josette03]

How fortunate you are to have a currency like the euro where you seem to do well when it’s up and even better when it’s down. And thanks for reminding us that the financial ills plaguing the euro zone were caused by the Americans. Enjoy the euro my friend before it goes the way of the dodo.

[TLCOhio]

While from a cruise passenger or traveler's point of view, a stronger dollar means buying more on their trip to Europe, a stronger dollar in the long run is not good for your country, because the strong currency will make it harder to sell your goods and services both in the U.S. and other countries, while a weaker euro makes it easier for the Europeans -- especially the Germans -- to start flooding the markets with their goods, at the cost of American jobs. Gunther and Uta

 

THANKS for taking time on your Silver Spirit sailing to share the views about the longer-range economics! It's not simple or easy to figure out where it will be in a month or a year. For every "positive" for one group, these swings creates counter-balances that affect others. Enjoy! Terry in Ohio

[oregon50]

Do you think we could see a return of some good European staff, like bartenders, with the closer to realistic exchange rate? OK, I'll answer my own question.....NO.