Americans ball out in Europe as the strong US dollar puts foreign luxuries on sale

“I could have my Gucci on”… That Meghan Trainor song you keep hearing in every single TikTok video is the current soundtrack for Americans in Europe. They’re flocking to designer stores across the old continent to take advantage of holiday deals, courtesy of the strong dollar. Since the Fed began hiking rates, the USD has strengthened against other currencies.

• Europe’s on sale for Americans. Last year, a buck would get you 0.82 euro. Today, you can exchange $1 for about €0.95. (Read: one dollar buys more euros.)
• American tourists in Europe spent, on average, 1.2K euros per transaction during the week of Black Friday, up from 500 euros three years ago.

“I could wear my Louis Vuitton”... in Paris with John. Luxe retailers like Kering-owned Gucci and LVMH-owned Louis Vuitton are raking it in thanks to American splurging. That’s helping them make up for the lack of high-rolling Chinese tourists (see: China’s Covid restrictions). For Americans, it’s a triple savings whammy:

• Strong Washington: The dollar is hovering at its strongest exchange rate in two decades compared to the euro.
• Home advantage: Since many luxury goods are made in Europe, they tend to be cheaper there (no US import costs). American shoppers are paying an average of 38% more for the same designer clothes bought in the US (vs. 20% historically).
• Tax bonus: Tourists who spend a certain amount at an EU store can often claim a refund on the sales tax (think: saving hundreds in tax on a designer bag).