So, you’re standing at a currency exchange kiosk or maybe just staring at a checkout screen for an international order, and you’re wondering: is the dollar actually worth more than the euro? Or is it the other way around?
The quick answer, as of January 15, 2026, is that one euro is worth more than one US dollar. Right now, the exchange rate is hovering around $1.16. That basically means if you want to buy one single euro, you’ll need to cough up about one dollar and sixteen cents in US currency.
But honestly, saying one is "worth more" than the other is kinda like comparing a pound of lead to a pound of feathers. It depends on what you're trying to do with that money. If you’re a tourist heading to Rome, the euro being "stronger" feels like a punch to the wallet. If you’re a US company selling iPhones in Paris, you’re probably smiling.
The Raw Numbers: EUR/USD in 2026
We’ve seen some wild swings lately. Back in late 2022, we actually hit parity—a rare moment where one dollar equaled exactly one euro. Since then, the euro has clawed its way back. In mid-2025, it even spiked toward $1.18 before settling into the current $1.16 range we're seeing this week.
Why does this keep changing? It's a tug-of-war between the Federal Reserve in the US and the European Central Bank (ECB) in Frankfurt.
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- Interest Rates: When the Fed keeps rates higher than the ECB, investors flock to the dollar to get better returns on their savings.
- Economic Growth: Germany, the "engine" of Europe, finally started growing again in 2025 (about 0.2% growth), which gave the euro a much-needed boost.
- Inflation: Both sides of the Atlantic are finally seeing inflation settle near that 2% sweet spot, but the US still feels a bit "hotter" than Europe.
The "Strength" Myth
People often think a "strong" currency means a "strong" country. That’s not always true. If the euro gets too expensive—say it jumps to $1.30—European exporters like BMW or Airbus start panicking. Why? Because their products suddenly become way too expensive for Americans to buy.
On the flip side, a weaker dollar makes American-made goods look like a bargain to the rest of the world. It’s a delicate balance.
Purchasing Power: The Big Mac Reality Check
If you really want to know what’s worth more, you have to look at Purchasing Power Parity (PPP). This is a fancy way of asking: "How much stuff can I actually buy with this?"
Economists love the "Big Mac Index" from The Economist. If a burger costs $5.89 in Chicago but the equivalent in euros only costs €5.10 in Lyon, the euro actually has more "buying power" on the ground than the exchange rate suggests.
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Currently, while the exchange rate says the euro is worth more, your daily cost of living in many parts of the US (like New York or SF) is still significantly higher than in European cities like Lisbon or Berlin. You might have "weaker" euros in your pocket in Portugal, but those euros will buy you a lot more espresso and bread than your dollars will buy in Manhattan.
Why the Dollar Still Wins (Sort Of)
Even if $1.16 equals €1.00, the dollar is still the "king" of the global hill. It’s the world’s primary reserve currency.
Think about it: when a country in South America buys oil from the Middle East, they don't usually use pesos or riyals. They use dollars. Roughly 80% to 90% of all foreign exchange trading involves the US dollar. The euro is a solid second place, but it’s a distant second.
What This Means for Your Wallet Right Now
If you're planning a trip or looking to invest, here’s the ground reality for January 2026:
- For Travelers: Europe isn't "on sale" like it was during the 2022 parity days. You should budget about 15-20% more than the face value of the euro for your expenses.
- For Investors: Analysts at J.P. Morgan and other firms are eyeing a move toward $1.22 by the end of 2026. If you’re holding euros, you might see their value against the dollar continue to climb slowly.
- For Shoppers: Buying luxury goods directly from Europe (like those French or Italian brands) is currently more expensive for Americans than it was a year ago because of the euro’s recovery.
The "value" of a currency is never static. It's a living, breathing reflection of how much the world trusts one economy over another. Right now, the world is placing a slightly higher price tag on the euro, but the dollar remains the undisputed heavy hitter of global trade.
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Actionable Next Steps
To make the most of the current exchange rate, you should:
- Lock in travel rates: If you have a trip to Europe planned for late 2026, consider booking your "big ticket" items (hotels, tours) now. With the euro projected to hit $1.20+, your dollar will likely have less power later this year.
- Check "Mid-Market" Rates: When converting money, don't just look at the $1.16 headline. Use services like Wise or Revolut to ensure you aren't paying a 3% "hidden fee" that banks often bake into their own exchange rates.
- Diversify Cash: If you're an expat or digital nomad, keeping a 50/50 split between USD and EUR helps hedge against the volatility we're seeing in the 2026 market.