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U.S. luxury shoppers traveling to Europe splurged on designer stores as the U.S. dollar and euro hit parity on Wednesday
American luxury shoppers traveling to Europe feel like they’ve hit the jackpot.
For the first time in twenty years, the euro and the US dollar have nearly equal value.
The weak euro is driving Americans like Shawna Wilson to splurge.
“Because the euro and the dollar are pretty much the same, it definitely encourages us to spend. It’s like it’s on sale here, so we have no problem getting our groceries.
COLORADO TOURIST AND MOM, SHAWNA WILSON, 49.
Wilson is among many American tourists flocking this week to Avenue Montaigne in Paris, a strip of luxury stores home to designer labels such as Louis Vuitton, Chanel and Gucci.
“I’m very happy that our US dollar is so strong, just as I come to Europe.”
NEW YORK TOURIST AND RETIRED TEACHER, SUSAN WEINBERG.
For Americans, buying a Chanel bag here could be a thousand dollars cheaper, with savings on the exchange rate and border tax refunds on the way home.
But Erik Norland, senior economist at the CME Group in London, warns it’s not as simple as it looks.
“My personal observation with luxury brands is that prices for these products tend not to vary from country to country as much as one might expect. Another thing Americans need to consider, s ‘they expect good business in Europe is that in Europe in general there are much higher value added taxes in the U.S. That said, Americans shopping here may often get the value added tax rebates when they leave so that’s also something to look into as there could be a lot of math involved trying to find good deals and it might not be as simple as people think.
CME GROUP, SENIOR ECONOMIST, ERIK NORLAND.
On the other hand, European luxury shoppers like Sébastien Pozzi of Lyon, France, will feel a pinch at home – and on their trips to the United States.
“Maybe we won’t buy anything. In France, it’s very expensive, this kind of brands, like Chanel, Dior. And here today… normally it could be cheaper in the USA, but with the exchange rate, it’s not possible. It’s too expensive for us.
TOURIST FROM LYON, FRANCE, SEBASTIEN POZZI.
Some analysts say parity could last at least a few weeks.