The UK Economy - Exchange Rates

Students come face to face with exchange rates when they take a holiday abroad or buy goods online from international stores. But they also need to appreciate the effect of changes in exchange rates on business. What happens when a currency strengthens (appreciates) against another? Who wins if the Pound falls in value against the Euro or the US Dollar?

The following chart provides students with up-to-date data on how the Sterling exchange rate has fluctuated in recent years against two key trading currencies - the Dollar and Euro. Can they describe the trends shown on the chart and then go on to explain some of the potential business implications?

Here is the interactive chart which plots daily movements in two key exchange rates: £/$ and £/Euro. It updates daily, so visit this blog entry whenever you want to check the latest value of the £.

Data from Timetric.

To view this graph, please install Adobe Flash Player.

Bank of England Target 2.0 from Timetric