The pound has continued its recent strong run against the dollar pushing firmly above $1.43. It is the seventh session in a row that the pound has made gains against the US currency. The strong means that among the G10 group of rich nations the UK has the best-performing currency this year. Traders say the the prospect of higher UK interest rates has made the pound more attractive while in the mean time the dollar has been hit by fears of trade disputes. Since the vote to leave the European Union in June 2016 the pound sank, but since then it has made a comeback.
http://www.bbc.com/news/business-43786232
5 comments:
It is interesting to see the Pound increase in value in the wake of Brexit. Hopefully this does not encourage more countries to leave the EU.
The pound increasing in international value could be a direct result of consumer confidence about Brexit. If consumers see Great Britain leaving as an economic event that will help Great Britain the value will increase. This also shows that Great Britain will import more because countries will buy less from them since it is relatively more expensive.
I agree. I think consumers are cognizant of the fact that Brexit was good for them. Additionally, the import increase may have negative repercussions in regards to their net capital outflow, so they may see a deficit occur in the future, but that is a huge (and probably inaccurate) hypothetical!
The increase in the pound would affect the international trade between the U.S. and The U.K which means that the imported goods from the U.K. would be more expensive. Also, it reflects that the UK government is starting doing well after they quit the European Union. I am curious how would the UK economy goes in the future.
The main effect of the rise in the value of the pound would affect international trade, mainly exports. Therefore, it would be interesting to see if net exports decreases considerably in the long run. I am also curious to see whether the number of people travelling to Great Britain would decrease significantly in response to the rise in GBP value, since it decreases the disposable income of those who are trading their currency for the GBP. This might affect travel to Great Britain.
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