Today, as a banker, I wanted to comment on the weak U.S. Dollar and weak British Pound Sterling. Personally, I attribute the weakness in both mostly to the involvement in the Iraq War. The Europeans aren’t really involved in this War, and the Euro has strengthened against both the U.S. Dollar and the British Pound Sterling.
I don’t look for a turnaround in this situation for a long time, because I don’t think anything with the War is going to be resolved quickly. If the Democrats win the White House in November, I might look for a small bounce upward in the dollar, but between now and then, I expect both the Dollar and Pound to continue their slides.
If you are holding currency in Euros, this is where I advise you to stay for the next six months.
Margot, the Marrakesh Banker
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This entry was posted
on March 13, 2008 at 8:12 pm and is filed under Banking, Britain, Currency Exchange, Currency Fluctuations, Currency Trading, Dollar, Economics, England, Euro, Falling Dollar, Falling Pound Sterling, Fluctuating Currencies, Foreign Pension Payments, International Business, Investment Advice, Investments, Iraq War, Pensions Abroad, Pound Sterling, Scotland, Travelers Checks, United States, Wales, War in Iraq.
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May 8, 2008 at 1:47 pm
The US dollar has been weakening against the UK pound for several years, reaching a record high for the pair. In fact if we go back to 1984, when the pair were virtually at parity ( one pound was worth just over one dollar), the US dollar has been in a steady decline since, and as recently as December 2007 reached the all time high of almost 2.12, a level not seen before. As a currency trader, the question I am always asked is where do I believe the currency is heading in the future – a critical question if you are thinking of buying and holding US dollar assets long term, or paying for these assets in US dollars. Naturally there are many factors which affect the long term relationship but my current reading of the charts would suggest that if the pound breaks below 1.93 then it is likely to weaken further to 1.75 in the medium term.