Dropping Dollar

We’re going to Spain in two weeks, Barcelona more specifically. And that means that the dollar has been falling steadily against the euro since we made our reservations. This is to be expected; whenever we go to abroad, the dollar drops, particularly against whatever the currency of the country where we’re going. Having something of a masochistic streak in me, at least when it comes to travel, I’ve been checking the exchange rate regularly, sometimes daily, since we booked our flight in December. There was a period in December and January where it held fairly steady around $1.32=€1.00, and even dropped to $1.29=€1.00 for a day or two in February. But then it started to drop again, and now is sitting at $1.48=€1.00, 11% below the December rate, a three-year low, and, according to this article, “is expected to decline for the a sixth straight week in the coming sessions on expectations the Federal Reserve will keep interest rates low while the European Central bank raises them.” I don’t have any idea what this means beyond the phrase “expected to decline.” But then I don’t think anyone – you, me, the Federal Reserve, or the European Central bank – understands economics, macro or micro. In the end, it’s all sleight of hand by I-don’t-know-who, if not just plain voodoo. What I do know is that our trip to Barcelona is going to cost us at least 11% more than when we booked it.