If you are one of the millions of Americans planning to visit Europe this summer after partial closures and lockdowns over the past two years, there is one more thing that may make your trip appealing – a strong dollar. The US dollar is at a 5 year high against the Euro which is rare in a summer season. But, will it matter?
The US Dollar Is Strong in Europe
As of today (April 27), $1.06 will get you €1. That is the strongest the dollar has been against the euro in 5 years and it is coming from a $1.23 to €1 just a little over a year ago. For a summer tourist season, this is a very strong rate and means that your US dollars will get you quite a few more euros.
But Increased Cost of Goods May Make it a Wash
But, it may not work out as positively as it did in years past. In the beginning of 2022, cost of some agricultural goods in Europe were already hitting higher prices due to extreme weather conditions in 2021. Add into this the increased cost of electricity for countries throughout Europe and prices were already trending higher before the war in Ukraine began.
When the war in Ukraine did start, it caused a number of food products to see price hikes again. For Greece, for example, this meant a limit on flour products as these prices rose and even caused some scarcity due to 80% of their flour products coming from Ukraine. This has been the case with dairy products as well as meats.
Fuel prices had shot way up as well putting some gas prices at over $10 a gallon. These have come down a bit but are beginning to rise yet again. This means that many transportation costs are going up a bit also or will be going up to adjust to the higher fuel costs.
What Does This Mean for the American Tourist?
So, what does this mean for you, an American tourist, coming with US dollars? Food prices, transportation prices, and even some hotel prices will be higher than in years past. But, with the dollar being at least 5 cents per Euro higher than last summer (and as much as 11 cents higher), it means that you will likely be coming close to even with what it would have cost you last year.
We are still early in the new tourist season for Europe so the euro could climb again as the summer kicks off. If you want, you could always order Euros ahead of time at your bank. Many banks will do it for customers with no fee and at the mid-market rate, which is the price between the buy and sell rates.