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Please educate me on exchange rates. To us consumers, it's relatively useless.

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Zeze

Zeze

Lifer
I've always noticed that exchange rate DOES NOT EQUAL to relevant buying power in their respective country. For what it's worth, the rate just pits how strong your currency is against theirs in the world economy.

So is there a sort of... real-world purchasing power index? Kind of like Big Mac Index.

I just got back from Switzerland. Let's use Swiss Franc (CHF) as example:

1 USD is roughly 0.91 CHF, mere 9%~ difference.

But 1 franc in Switzerland does not spend like 1 USD, but at 50~ cents USD

All the local, non-tourist cheap restaurants are 20-25 francs per dish (outskirts of Zurich, walking around residential areas). This includes Chinese take-outs. BK Whopper meal is about 15 francs.

For this purpose, exchange rate is essentially useless and unreliable. My so-called 'purchasing power' inside their own country only have to be experienced. There HAS to be a true, country's domestic purchasing power index of sort.

Is there?
 
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Zeze said:
But 1 franc in Switzerland does not spend like 1 USD, but at 50~ cents USD

All the local, non-tourist cheap restaurants are 20-25 francs per dish (outskirts of Zurich, walking around residential areas). This includes Chinese take-outs. BK Whopper meal is about 15 francs.

For this purpose, exchange rate is essentially useless and unreliable. My so-called 'purchasing power' inside their own country only have to be experienced. There HAS to be a true, country's domestic purchasing power index of sort.

Is there?
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That is because you are in the tourists area - where everything is overpriced... you have to wander out to the outer areas. Another reason is because the government taxes (VAT) is already built into the price of the products.
 
Peter Nixeus said:
That is because you are in the tourists area - where everything is overpriced... you have to wander out to the outer areas. Another reason is because the government taxes (VAT) is already built into the price of the products.
Click to expand...

Nope, not in tourist areas and you've missed my point.

I was roaming the outskirts of Zurich where locals worked and dined, supermarkets sparsely used by locals, and where locals drank in their normal bars.

Anyone who's been traveling internationally would feel that exchange rate has little to do with its equivalent supposed purchasing power.
 
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Different things have different costs in different countries. Lots of factors go into it, and I don't think it could be broken down in anything less than a book. Exchange rates matter when you purchase foreign products online from their countries. The price will drop as the dollar raises in value.
 
Living next to the U.S. for my entire life, the exchange rate between the US-CAD just tells me how much lube I should apply after bending over.
 
Zeze said:
Nope, not in tourist areas and you've missed my point.

I was roaming the outskirts of Zurich where locals worked and dined, supermarkets sparsely used by locals, and where locals drank in their normal bars.

Anyone who's been traveling internationally would feel that exchange rate has little to do with its equivalent supposed purchasing power.
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Yep. I was in Geneva, Switzerland just a couple of weeks ago. Nice place but damn near EVERYTHING is ridiculous, except wine. My sister's lived there for a couple of years and she took us to some restaurants the locals frequent and the prices got a lot better, but they're still sub-par compared to US.

Hell in the grocery store you have to pay .30/bag if you want to bag your items, and an undersized can of coke was 1 franc. Don't even get me started on the meat section.

On the flip side everything was high quality. You pay for it, but their economy brands blow our economy brands out of the water.
 
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