A little wiser, there has also finally been some detail put on the bbc web site.

So if I mix these things together, this side of the atlantic the economies hence currencies were viewed as stronger than the US one the rates have been very good. The choice of the BoE to hold interest rates instead of putting them up (GCSE economics very hazy) has showed how weak / fragile our economy is along with the level of inflation makes our currency much weaker.

Looking at the BBC comment the people who usually dabble with the dollar dived into commodities (oil etc), but now they are coming out of hibernation as the price of these falls and the stuff on our economy makes the dollar a bit more attractive again.

Yes a bit mind blowing (try not to think this much at work) but at some point I suppose the value as it were of the economies each side of the atlantic will even out, they'll start dabbling in commodities again when the price gets attractive enough and thankfully not dealing in millions so it wont break the bank but nice to understand what is happening

In the words of Clive Dunn 'Don't panic!' Last time we went the rate was down at $1.50 to the £, so still not a bad deal.

Cheers Burger.

Hi,

This is obviously a complex subject but below is my understanding of why the dollar has strengthend.

The ECB (European central bank) & UK have been adamant that they would fight inflation with interest rate rises hoping to stave off rampant inflation, however the economies in the EU & UK have fallen so fast that there is a fear of a massive credit crash if they put rates up - at interest rate meetings last week it was decided that rates should be put on hold instead of being raised. The market has since been re pricing rate cuts in the UK & EU as this seems to be the only action that can avoid a credit liquidity seize up.

Simply put the dollar has strengthened against the pound/euro amid belief that US economy is in better shape than other countries- this has now been priced into the market & its likely that in the short term the dollar will continue to strengthen against the pound.

Are you any the wiser? lol

Burger

The rate has fallen 6/7 cents over the last week or so.

What has caused this ?

Going away in October been swapping over every time it gets close to $2 / £ but nervous it will drop much further and whether I should fill my boots now so to speak.

Can you help ?