Can You Actually Afford Europe This Summer?
Tuesday, March 9, 2010
With the first hint of warmth in the air and the onset of daylight savings time this Sunday, our thoughts begin to turn to the summer and we enter that glorious period of summer travel planning. With that in mind we kick off “Europe Week” here at TheExpeditioner.com (following last year’s ever-successful “Ski Week” and, well, ill-fated “Shark Week”).
So what do active travelers and international currency speculators have in common? They both obsessively follow exchange rates. (Ask any good traveler how the dollar’s doing and you’re likely to get a pretty accurate quote against several different currencies.)
With the recent economic troubles in Europe and the U.S.’s sort-of economic recovery, things are looking up for the dollar, something we Americans haven’t experienced in years. The WSJ takes a look at how the dollar’s recent rise against the euro is suddenly making Europe look, if not affordable, at least doable for the budget traveler for the first time in recent memory.
As the WSJ notes, before concerns about Greece and other countries in Europe began, it took $1.49 to buy one euro. Today that number has dropped 9% to $1.36. Not huge, but as we all know, every penny counts on the road.
But consider this: at that rate France costs just 23% more than than the U.S., and Spain and Greece are just 6% more. (Down from around 33% and 17% respectively.)
So what does it take to break even? One dollar for one euro, right? Actually, given cost of living and other complicated algorithms and equations I’m not even close to smart enough to explain, parity actually comes at $1.10 per euro.
Any chance of the euro heading that low? Not according to experts:
Julian Jessop, chief international economist at the Capital Economics consultancy in London, sees the euro tumbling to $1.25 by year-end. “We still think the euro should be a lot lower,” he says. “We think the outlook for the European economy is a lot worse than for the U.S. And Greece is only a symptom of a wider problem: Does the eurozone make sense as a currency union?”
Still not bad though. At least it will free up time from street performing to explore your surroundings.