Almost exactly 20 years ago to the day was the last time that US Dollar was worth more than the Euro – and it was that day, July 15, 2002, that the Euro climbed on past and kept right on going. However, over the last few months, that time of parity – the US dollar and the Euro being equal – has been getting closer and closer. Now, it is here One Dollar equals One Euro!
One Dollar Equals 1 Euro $1=1€ – First Time in 20 Years!
As of just a little while ago, the US dollar became equal to the Euro (check out the image below to see it!). This makes shopping in Europe (or, from Europe) very interesting right now. There are a lot of things that have historically cost quite a bit more in Europe than the US due to the exchange rate so now it is somewhat of a shopping bonanza for some items – even if you are in the US.
Some Things Cost Less from Europe than in the US!
For example, if you can buy a pair of running shoes (one of the things I have been shopping for and just bought for the first time in Europe recently!) for $100 in the US and that same pair costs €100, depending on the state you live in, it is actually cheaper in Europe now because of the sales tax you would pay in the US. In Europe, there is the VAT (value added tax) which is built in to the price so what you see is what you pay.
There are also some things – including some electronics – that are now much cheaper to order from Europe than the US. It depends on the country of manufacture and other things but there are some things that you can order from a European Amazon site to ship to the US and you would save a lot of money and not have customs!
Amazon will take an import duty deposit of the estimated amount so there is no surprise on the duty side. But, since the item is shipping out of Europe, the VAT (value added tax) comes off it, making it quite a bit cheaper than its US counterpart. Just remember that some electronics will only have coverage from their warranty in the region it was purchased in.
What Does This Mean for European Travel?
But, what does this truly mean for your travel to Europe this year, if you plan on making such a trip? Well, it is somewhat difficult to say exactly since the world is facing inflation rates that are quite high. Europe, as a whole, is currently at 8.6% inflation with some countries doing worse than that (Greece is over 12%). The same applies to the US with inflation as well.
In Greece, for example, there have been price hikes on food that have gone up to 30% in the last few months! Electricity has also seen hikes due to the Russia/Ukraine conflict going on now. This means that, for a tourist, things like restaurants are going to be charging more than they did in previous years and hotels will also be charging more to cover their increased cost in electricity.
However, there are still deals to be had and, in some places in Europe, it could actually be significantly cheaper to travel to Europe this year, with the US Dollar, than in previous years. I have seen many prices at hotels in Greece actually not that much more expensive than previous years so you can get a bargain with those. If you feel certain about your travel plans, you could even pre-pay for your lodging now and lock in the sweet USD = Euro exchange rate. But, it will still likely go down so you may want to wait and see.
If you already have travel plans to Europe, expect that US dollar to take you a little farther than you could have gone a few months ago, thanks to the stronger dollar now. Price hikes are all around us but the power of the dollar takes some of the sting out of those inflationary costs.
Just make sure you are using a credit card with 0 foreign transaction fees!!!