Posted by Allison on 16 October 2009, 15:16
One of the key exchange rates that many people look at on their currency converters is the one between the British pound and the US dollar. And at the moment the good news is all on the side of the US dollar.
A brief news story released on the Bloomberg website revealed that the pound has reached its lowest ebb for some months. If you take a look at how the pound has fallen against the US dollar since this time last year, there is a definite pattern of losses against that currency.
If we take figures from the first day of every month we can gain a reasonable picture of what has been going on. For example, back on the 1st October 2008 the pound stood at 1.7781 US dollars. Just one month later on the 1st November, it had dropped markedly to 1.6211. That was a loss of nearly sixteen cents in just one calendar month.
But there was worse to come. By the time December got underway, the exchange rate had gone down even more to 1.4981. That meant a loss of just over twelve cents in one month, and a total of twenty eight cents in those two months put together.
2009 kicked off with a further fall to 1.4611, and this was followed by a lower figure of 1.4274. The rot slowed down the following month as March got underway with an exchange rate of 1.4157, and then things started going in the opposite direction again at last.
April looked healthier as it began on a rate against the US dollar of 1.4388. But a bigger leap up was in store the very next month, as May started on 1.4859. It seemed as if the pound was back on the road to recovery again – at least as far as its tussle with the US dollar was concerned.
But June was the best leap forward of all. By the time the last day of May had passed and the new month began, the pound was bringing home 1.6382 US dollars. This was over fifteen cents healthier than it had been just a month earlier.
But while there were a couple more improvements still to come – up to 1.6463 on 1st July and 1.6524 on 1st August – that was the best we would see in a while. September 2009 started with a lower rate of 1.6238, and at the time of writing on 12th October, the exchange rate against the US dollar had fallen to 1.5820.
So just as we all thought the pound was gradually regaining its strength, it seems to be going back in the opposite direction again. This is nothing short of disappointing, and there is every suggestion that the fall could be more than just a short blip too.
Some think that the pound could dip a lot lower than this in the coming months, as it goes through another prolonged period of weakness. There is no doubt that the UK has had a rough time during this recession, and we should not expect a miraculous recovery anytime soon. But that doesn’t mean we shouldn’t hope for it in the long term – even if we have a long time to wait before it actually happens.