Pound plummets, dollar strengthens

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Wow.

Since July 17, the British pound sterling has dropped a quarter of its value against the U. S. dollar -- from $2.00 per pound to $1.48 yesterday. The pound was just under $2 when my son and I visited Britain last year. That's the most favorable rate for the dollar in many years.

The U. S. dollar has strengthened against the Euro, the Canadian, Australian, and New Zealand dollars, and the Swiss Franc as well. The Euro went from a high of $1.60 on July 15 to a current value of $1.25. The Loonie fell from par in mid-July to a current value of 80¢. The Swiss Franc slipped from just under par (99¢) to 83¢. The Australian dollar fell from 97¢ (again, mid-July) to 64¢. The Kiwi buck fell by 30%, from 77¢ in mid-July to 56¢ yesterday.

Most of the currencies began a steady decline in late July, but the Loonie and the Mexican peso continued to hover just below those summer highs until late September before making a steeper drop to their current levels. (The peso also fell by about 25% -- from 10¢ to 7.5¢.)

Among major currencies, only the Japanese yen has improved against the dollar. 100 yen were worth 90¢ in August; today they're worth $1.07.

Good time to be an American tourist. Not such a good time to be an American manufacturer.

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4 Comments

I'm told by my Australian contacts that people there are rushing for the "safety of the American dollar". Their situation appears to be worse than ours, even accounting for the fact that we're only 50% through the mortgage defaults. Even with these severe problems that are facing us, the fact that we are more suspicious of government salvation works in our favor to actually prevent us from falling as far as some others.

Perhaps luckily these days, America doesn't manufacture nearly as much as we used to. Never thought I'd ever write that sentence.

Brent Taylor Author Profile Page said:

Remember it wasn't but four months ago, and all the experts telling us the sky is falling, and were saying the day of the dollar was over, and now the entire world would be moving the Euro? Woe is us.

And that the real reason oil was so high this summer was because of the weakened dollar? Never mind the exchange rate remained pretty stagnant from March thru July while a barrel of crude skyrocketed. And I was to gutless to short oil, even though I knew it a crock.

And the experts last year were telling us that the earth was burning up and all the libs moaned now the polar bears would be extinct in a generation? Never mind, this year glacial mass actually increased. The same experts that told us 1975 that we were entering the ice age?

And experts are telling us that Pres. Elect Obama is going to be a unifier, and a man of hope and change.

And now the local experts were telling us that if we just had an arena, good times would be had by all? And if we could just pass the bond issues, are streets would be paved with gold?

What does it take to be called an expert or a scholar?

I think I'll call myself a scholar on my resume and submit to Washington.

Brent Taylor Author Profile Page said:

Gad...are/our

Brent Taylor Author Profile Page said:

More Gad too/to

Sorry Michael. This is what happens when you should be in bed and are instead being a smart aleck, wasting somebody's bandwidth.

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This page contains a single entry by Michael Bates published on November 14, 2008 12:20 PM.

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