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What the dollar-euro exchange rate means for Americans in Europe

The euro sunk below $0.99 on September 5th, marking a 20-year-low for the single currency against the dollar. Here is what that means for Americans in Europe.

What the dollar-euro exchange rate means for Americans in Europe
Photo by Ibrahim Boran on Unsplash

The euro fell 0.70 percent to 0.9884 dollars on Monday September 5th at 0535 GMT, its lowest since December 2002.

Earlier in the summer the currencies had already reached parity with US news outlets are deeming it a “good time to be an American in Europe.”

For Americans who went on holiday in Europe this summer, they could rejoice over wine, taxi rides, and even luxury items being “cheaper than they have been in decades” all thanks to a strong dollar. 

According to American news outlet, CNBC, the near drop in the euro meant that Americans “travelling to one of the 19 European Union countries that accept the euro” will get a “15 percent discount on purchases today relative to a year ago due to the exchange rate.”

But the benefits are not just for American tourists – Americans residing in Europe, as well as European tourism sectors, stand to gain from the exchange rate too. For the tourism industry in Europe, which was hit hard by the Covid-19 pandemic, the weak euro might actually be beneficial, as it might entice more American tourists to spend their holidays here.

For tourists

Americans had become accustomed to budgeting extra for European vacations when taking the exchange rate into consideration. In 2008, the New York Times reports that a €5 glass of wine might have cost Americans the equivalent of $8, compared to the $5.20 it might cost today. Here is what Americans wanting to get a good bang for their buck in Europe this summer should know: 

First, it might not be advisable to go book your trip right now simply because the exchange rate is advantageous for American travellers. Willis Orlando, a travel specialist at Scott’s Cheap Flights told CBS news that “other factors like large crowds still mean higher prices at hotels.”

Unfortunately airfare and lodging are more expensive this summer than they were last year (up 20 to 60 percent in some markets) due to high demand and inflation. On top of that, the airline industry is in crisis, attempting to handle staff shortages and high volumes of tourists, which has led to strikes, cancellations, and long-wait times in airports across Europe.

READ MORE Airport chaos in Europe: Airlines cancel 15,000 flights in August

However, if you do have a trip planned already, you can look forward to your dollar going a longer way at restaurants, stores, and when shopping.

If you want to maximise your benefits from the currently favourable exchange rate, you can take a few money-saving steps:

Use an ATM to withdraw local currency – Instead of converting dollars to euro at the airport or at a conversion teller, who will charge a commission in addition to the exchange rate, simply use an ATM once in Europe. 

Pay with your credit cardForbes recommends this for American tourists, but when paying with your credit or debit card beware of foreign transaction fees. Also be aware that many businesses in Europe do not accept American Express. Another tip is to pay in ‘local currency’ when using your credit card, as if you pay with dollars you could wind up with a conversion fee. 

Consider pre-booking – If you want to lock in the current exchange rate, then consider prepaying for your trip. However, you might not need to do this, as the dollar is expected to “remains strong for months to come,” according to CBS News.

Take advantage of tax-free – The Value Added Tax (VAT) is the sales tax in Europe. If you spend over a certain threshold of money at a single store, you can request a tax-free form to receive a refund on the VAT. You can file this form at the airport or train station when departing.

For Americans living in Europe

The close exchange rate is beneficial for Americans who are residents in Europe as well. The principle is the same – for example, if you have a rent payment coming up, and you have been wondering about the best time to transfer money from your American account to your European bank account, consider doing so now. Your American dollars gaining value means they will go a longer way than they did even just six months ago. If you want to transfer a large sum, check with your American bank account to see what the maximum transfer amount is prior to doing so. 

The euro-dollar rate also benefits Americans residing in Europe who might be looking to buy property in France, as well as those who have any income dollars, whether that be in salary, pensions, or investments. 

Of course, for Americans living in Europe and making their income in euro, the opposite is true that travelling back to the United States will be more expensive now than last year. In this case, it would be worth considering locking in your rates by prepaying for bookings.

The dollar will likely remain strong for the next few quarters, as its value-increase is due to the Fed raising interest levels in the US, making it more attractive for investments than Europe, who is currently suffering from a shortage in gas supplies due to the ongoing war in Ukraine. 

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TRAVEL NEWS

How you to save money travelling by train in France

Travelling by train is one of the best ways to see France, as well as being better for the planet than flying or driving. However, train tickets don't always come cheap - here is a current list of the railcards and offers that can cut the cost.

How you to save money travelling by train in France

Railcards are the most common way to cut the cost of a ticket. In some cases, the card can even pay for itself in one journey. France’s rail operator SNCF has a range of cards available for everyone from impoverished students to regular business travellers with an expenses account to burn.

But if you’re not a regular traveller there are also a range of offers plus cheaper services to opt for.

READ ALSO Millions of train tickets go on sale in France for Christmas holidays

Liberté card

This one’s really for business travellers, who use the TGV or Ouigo and Intercite trains regularly. And it comes with a price to match – €399 for a year (€379 for anyone lucky enough to work for a company that is part of SNCF’s Contrat Pro plan). 

Holders can enjoy fixed, destination-based fares for business travel in France and beyond, with a card that guarantees cardholders 60 percent off SNCF’s Business Première fares when travelling standard class, and 45 percent off Business Première fares when travelling 1st class. 

Plus, there’s 30 percent off for you and an accompanying adult plus 60 percent off for accompanying children with SNCF’S Avantage fare.

Max Senior

Regular rail travellers aged 60 and over, who use TGV, InOui or Intercite trains at least twice a month can take advantage of this €79-per-month railcard that covers the cost of all standard-class travel outside peak hours from Monday to Friday.

The card is valid for all routes in France and to Luxembourg and Freiburg im Breisgau. You can use the card to book tickets from 30 days before departure right up to the last minute.

READ ALSO Yes, train travel from France across Europe is far better than flying – even with kids

Avantage Senior

Those aged 60 and over who travel by rail less regularly can buy a €49 Avantage Senior card that offers 30 percent discounts on first and standard-class travel on TGV INOUI, Intercités or TER trains for a year.

It also offers a 60 percent discount on tickets for up to three accompanying children aged between 4 and 11.

Standard class fares are capped for all destinations in France, no matter when they are booked – at €39 for a journey of less than 90 minutes, €59 for a journey of between 90 minutes and three hours, and €79 for journeys over three hours.

Max Jeune

A similar offer to the Max Senior deal is available for regular rail users aged between 16 and 27 who use TGV, InOui or Intercite trains at least twice a month. This key difference is that this €79-per-month railcard covers the cost of all standard-class travel outside peak hours seven days a week.

The card is valid for all routes in France and to Luxembourg and Freiburg im Breisgau. You can use the card to book tickets from 30 days before departure right up to the last minute.

READ ALSO UPDATED: The best websites for cross-Europe train travel

Avantage Jeune

Those aged 12 to 27 who travel by rail less regularly can buy a €49 Avantage Jeune card that offers 30 percent discounts on first and standard-class travel on TGV INOUI, Intercités or TER trains for a year.

Standard class fares are capped for all destinations in France, no matter when they are booked – at €39 for a journey of less than 90 minutes, €59 for a journey of between 90 minutes and three hours, and €79 for journeys over three hours.

Max Actif and Max Actif+

The Mon Forfait Annuel Télétravail pass is basically a season ticket, but for people who don’t travel every day. It’s ideal for part-time or remote workers, but can be used by anyone who has semi-regular train trips. 

Anyone who travels between two and three times a week on the same route can buy a Max Actif pass and travel 250 or times on the same line all year, weekdays only. The Max Actif + is basically the same, but for people who travel four to five times a week, and gives 450 journeys with no weekday limit.

Prices vary depending on the route you travel – full details are here

Weekly or monthly rail cards

Speaking of season tickets, you can also buy first or standard class rail cards that last a month or a week that allow unlimited daily travel, and tickets for €1.50 or less (via SNCF Connect or Trainline) for single or national routes.

Avantage Adult

For anyone aged between 27 and 59, a €49 Avantage Adulte card offers 30 percent discounts on first and standard-class travel on TGV INOUI, Intercités or TER trains for a year.

It also offers a 60 percent discount on tickets for up to three accompanying children aged between 4 and 11.

Standard class fares are capped for all destinations in France, no matter when they are booked – at €39 for a journey of less than 90 minutes, €59 for a journey of between 90 minutes and three hours, and €79 for journeys over three hours.

For more information on railcards available in France, click here

READ ALSO Tourists and locals: Paris Metro tickets, passes and apps explained

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