It’s hard to imagine summer when it’s the middle of February in Chicago, but summer, as always, will be here soon. If your summer travel plans include a trip to Europe, you’ll be pleasantly surprised to see that the dollar has had a rather strong rally versus the Euro since last year. This means your dollars go farther in Europe than they did one year ago, making a European vacation more affordable.
The benefit of a stronger dollar
In July 2024, one Euro cost $1.12 but as of this writing, as I move across the Italian countryside at 110mph on the Frecciarossa fast train to Rome, The Euro costs only $1.03. So, your 250 Euro hotel that last year cost $280, now costs only $257. That’s like getting a breakfast for two, every morning, for free.
Here are some reminders to make your trip more enjoyable:
Rome: 2025 is a Jubilee year for Rome and the normal 5mm to 10mm visitors is expected to swell to 30mm for 2025. Unless you are going to Rome specifically for Jubilee, I’d say look elsewhere in Italy for travel. Many people visit the north and sometimes venture as far south as Naples, but I’d recommend, especially if you haven’t been, to visit the Puglia region.
Puglia: There are direct flights from JFK directly into Bari and from there the train service is excellent all along the Adriatic down to Lecce. It is a seafood forward, less expensive, more casual environment than Rome, Milan, or certainly Venice, with more Rhone style red and white wines than the typical Tuscan or Piedmont you may be familiar with in the north. A meal for two, with a bottle of wine, can often be found for less than 25 Euros. As a bonus, one of the very oldest cities in the world is Matera which dates back over 10,000 years (not a typo) and is a UNESCO World Heritage site. One caveat, the summers can be extremely hot in Southern Italy, so plan accordingly.
Some tips with currency conversion
Some tips: Use your ATM card to get cash. Schwab reimburses all ATM fees so no need to worry there. When the ATM asks if you want the local bank to convert Euros, just say no. Let Schwab do the conversion. And, the same goes for a restaurant or hotel. When you pay with a credit card, you’ll often be asked if you want to pay Euros or in dollars. ALWAYS pay in the local currency and let the credit card do the conversion. Believe me, that cute boutique hotel on the hill in Southern Italy is not giving you the same exchange rate as Visa etc!
If you do go to Italy, download the TrenItalia app to your phone. Not only will you be able to look at the train schedule and plan your day, but you’ll be able to purchase your tickets in the app and hold them in your digital wallet much like you would theater tickets, airline tickets, or credit cards.
Take advantage of the relative strength of the USD versus the Euro. This dynamic makes a European vacation more affordable than you think… so make that trip you’ve been thinking about! Portfolio returns have been good over the last few years and we, as always, will be watching your portfolio and making the usual necessary rebalances. If you have questions, reach out to me directly. I’d welcome your comments or questions.
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