WHAT THE DOLLAR IS ACTUALLY WORTH IN EUROPE RIGHT NOW
And what it means for your monthly budget.
The dollar weakened against the euro between 2025 and early 2026. The difference shows up in lodging, groceries, restaurants, and transportation costs. Americans drawing fixed dollar income like Social Security, a pension, or investment distributions pay more in dollars for the same euro expenses every month.
The euro has been trading between roughly $1.08 and $1.18 in early 2026, with rates holding closer to the higher end for much of early 2026. At $1.12 a monthly budget of €3,000 costs $3,360. At $1.18 that same budget costs $3,540. On a three-month stay the difference between those two rates is $540.
The rate you see when you search online is the interbank rate. Your actual rate is set by how you pay. A card with no foreign transaction fee applies a rate close to it. A card with a foreign transaction fee adds 1 to 3 percent. At the point of sale, paying in euros means the card sets the rate. Paying in dollars means the merchant sets it, and merchant rates run higher.
At ATMs the same logic applies. Bank ATMs apply the card's exchange rate. Independent ATMs add a separate fee per withdrawal on top of the bank's own charge.
For larger transfers, the method determines the rate and the cost. Wise and Revolut get rates closer to the interbank rate than many traditional bank wires. On a $10,000 transfer the difference can be $200 to $400 depending on the provider and the rate that day.
We keep a balance in Revolut, watch for a rate within the range we budgeted for, and transfer USD to euros when it is there. For everything else we use our credit cards.
Banks and card issuers differ on whether they accept travel notices before departure. We check and submit one when the option exists. A card flagged for foreign activity mid-stay takes time to resolve. Carrying cards from two different banks means one works while the other is being sorted out.
When the rate moves against you mid-stay, accommodations are already committed. That cost does not respond to the rate. Groceries, eating out, and day-to-day spending do. Euro prices stay the same. A weaker dollar means those same euro amounts cost more in dollars each month. The difference shows up when the monthly totals come in.
A five-cent move on a monthly budget of €2,500 is $125 in either direction. On a six-month stay that is $750. We set the budget against a rate it can handle before the spending happens. The exchange rate is part of the quarterly budget, not something we follow day to day.
The same calculation applies when income is in dollars and spending is in another currency. Europe is where we are planning around it right now.
We built that cushion into our three months in Sète. Here is exactly what we spent and why January looked nothing like February.
Scott & Liza
