If you’re traveling to the United States, or if you have business dealings with Americans, it’s important to be aware of the current exchange rates between the Pound and the US Dollar. This will help you to budget appropriately, and make sure that you’re getting the best possible deals when converting your money.
The Pound to the USD exchange rate is currently at 1.3, meaning that for every £1 you exchange, you will receive $1.30. This is a slight decrease from the previous exchange rate of 1.35, which was seen in May 2017.
Few factors influencing the Pound to the USD exchange rate.
State of the economy
One of the main indicators of a country’s currency strength is the state of its economy. If the UK economy is doing well, then the Pound will be stronger against the Dollar. Conversely, if the US economy is doing better than the UK’s, then the Dollar will be worth more.
Interest rates are another important variable that influences exchange rates. If the UK has higher interest rates than the US, then this will make the Pound more attractive to investors, and thus increase its value. However, if interest rates in the US are higher, then this will lead to more investment in America, and cause the Dollar to strengthen.
Inflation is another key factor that affects currency exchange rates. If the rate of inflation is higher in one country than in the other, this will lead to a decrease in the value of the currency. For example, if the UK has a higher rate of inflation than the US, then the worth of a Pound to USD will be less.
Political stability is another key factor that can affect a country’s currency. If a country is politically unstable, this can lead to a decrease in the value of its currency. For example, the Pound has been weak in recent years due to the political turmoil in the UK surrounding Brexit. Conversely, the US Dollar has become stronger in recent months due to the relative political stability in America.
Central bank policy
If a country’s central bank adopts policies that are favorable to its currency, this will lead to an increase in its value. For example, if the Bank of England adopts policies that make it easier to borrow money, this will lead to an increase in the value of the Pound. Conversely, if the US Federal Reserve implements policies that make it more difficult to borrow money, this will lead to a decrease in the value of the Dollar.
External factors refer to any factors that are outside of the two countries’ economies and politics. Some of the main external factors that can affect currency exchange rates are:
Exchange rates between other currencies
If the Pound is stronger against the Euro, for example, than the Dollar, this will lead to an increase in the value of a Pound to the USD.
If the price of oil, for example, decreases then this will lead to a decrease in the value of the Dollar, as America is a major producer of oil. Conversely, if the price of gold, which is priced in Dollars, increases then this will lead to an increase in the value of the Pound.
A terrorist attack in either the UK or the US can decrease the value of that country’s currency. This is because investors will be less likely to want to invest in a country that is seen as being unstable.
What could this mean for you if you’re exchanging money?
If you’re exchanging money, it’s important to keep an eye on the current exchange rates. You can do this by checking online, or by speaking to a currency specialist. They’ll be able to tell you what the rate is currently, and give you an idea of how it might fluctuate in the future. This will help you to budget for your trip, and make sure that you get the best possible deal on your currency exchange.
The exchange rates between the Pound and the USD are constantly fluctuating, as a result of a variety of different factors. It’s important to keep an eye on these rates if you’re exchanging money, to get the best possible deal.