If your card doesn't charge foreign transaction fees, you should always pay in the local currency. The exchange rate will be better than whatever the vendor gives you.
It's easy to get complacent as a consumer. I was thinking about it the other day how I never check my receipt at the grocery store. I just put whatever I need on the belt and pay what the machine tells me to pay. I could be getting ripped off every time and I'd likely never notice.