Why is the British pound twice as valuable as the US Dollar?
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Filed under: Currencies
The currency is stronger since they are not as in dept as the US currently is. There is also less of it in circlulation compared to the US dollar. The less there is to go around, the more valuable it becomes.
I don’t know why.
Because America is broke and the UK is not.
The British Pound IS NOT 2x as valuable as the USD Dollar. Don’t confuse the exchange rate with the purchasing power parity of the Pound/Dollar.
The Exchange rate is £1 = $2
The PPP of the Pound is only 18% more valuable (per the BigMac Index)
What this means is that if a bar of soap in the US costs $1.00, it costs the eqivalient of $1.18 in Britian. So you’d pay about £0.59/pence in Britian.
Because, the US economy is going down faster than ever before …..definitely faster than the British Economy .It’s a relative trend.
U.S.A. is in a debt crisis, while U.K. is not. Traders see that the dollar is not that steady and decided to sell them and buy other stronger currencies like for an example: British pound. But things in Britain is way more expensive, like a hamburger is costs 10 pounds, equivalent 20 dollars