USD-GBP exchange rate

[*Snowdrop* 604]

I bolded the part of your post that has been a problem for us - now that my husband has been here three years.

The going back over bit has been gut-wrenching to say the least. It was pretty discouraging to plan a visit and try to save twice as many dollars as needed in sterling to stay in a hotel, dine out, do any shopping or even just visit the pub. Once you are over here living and working, dollars are all you've got. The backblow hasn't been pretty.

Oh absolutely - and selfishly as soon as I get over there settled and earning dollars I'll be right there with you on the same page. Right now I'm weeping into my pile of sterling.

[Trompe le Monde 1,107]

Well, it is generally good news for us based in the US when it comes to visiting - I have to admit to feeling punched in the stomach when I was over last may every time I had to pay for something.

But I can understand the frustration of those who haven't switched their money over yet.

[Lansbury 19]

I don't mean to be impolite, but ..... sterling is still worth MORE than the dollar. You can still bring your money over here and it's worth more than over there.

I don't think it is, on spending power it is worth less.

The parity spending power is around $1.60, ie £1 in the UK buys what $1.60 would in the US. If you get an exchange rate less than that you are in effect losing money.

Parity spending power? Where does that figure come from? Wouldn't that be something 'relative' such as what Robin talks about in her post just above hers? And would it also not be a figure that would adjust itself based upon world conditions?

May I suggest that you look at A Beginner's Guide to Purchasing Power Parity Theory http://economics.about.com/cs/money/a/purchasingpower.htm

The figure generally accepted as the parity rate between the pound and the dollar is $1.56 to $1.60 to £1

[mawilson 2,133]

And for those of you having a laugh about the dollar all these years, who's laughing now?

[no name 1]

And for those of you having a laugh about the dollar all these years, who's laughing now?

no one except you, judging by your icon on this topic.

Edited November 18, 2008 by illumine

[mawilson 2,133]

And for those of you having a laugh about the dollar all these years, who's laughing now?

no one except you, judging by your icon on this topic.

And maybe Rebecca

[Trompe le Monde 1,107]

yes, well, as stated above these things are pretty cyclical

[Big Papa Zone 93]

Oh absolutely - and selfishly as soon as I get over there settled and earning dollars I'll be right there with you on the same page.

Precisely. We'll all piss and moan about it whilst we're this side, but after the initial disappointment of accepting having $$$$ less than we thought we would have, when we get over there we'll be thankful for a more realistic exchange rate.

The simple fact of the matter is that the pound, like oil prices and houses, has been seriously over-inflated for some time, and the market is now correcting itself.

C'est la vie.

[rebeccajo 14]

I don't mean to be impolite, but ..... sterling is still worth MORE than the dollar. You can still bring your money over here and it's worth more than over there.

I don't think it is, on spending power it is worth less.

The parity spending power is around $1.60, ie £1 in the UK buys what $1.60 would in the US. If you get an exchange rate less than that you are in effect losing money.

Parity spending power? Where does that figure come from? Wouldn't that be something 'relative' such as what Robin talks about in her post just above hers? And would it also not be a figure that would adjust itself based upon world conditions?

May I suggest that you look at A Beginner's Guide to Purchasing Power Parity Theory http://economics.about.com/cs/money/a/purchasingpower.htm

The figure generally accepted as the parity rate between the pound and the dollar is $1.56 to $1.60 to £1

Thanks for that. It's been a long time since my Economics classes and the exercise was forgotten to me. As the example of baseball bats illustrates, the parity will come into alignment over time. I certainly can understand the disappointment of the declining value of sterling, but the golden goose couldn't keep laying those eggs forever. Parity or not you are still far better off bringing piles of sterling to the US than the other way round, especially if the cash is moving from devaluing real estate to devaluing real estate. The rules of parity, as your example explains, should apply.

And I'm not 'laughing' anymore than Mark is, btw. I am, admittedly, relieved a bit as we have a trip to the UK planned for March. That's light years from now though, in the present economic climate. And it certainly isn't the equivalent of moving tens of thousands of a currency.

As Damien says, c'est la vie.

[Eli the Barrowboy 16]

Well I can't complain - we got $2.02 to the pound and did it all in one foul swoop.

I still have business interests in the UK that pay me into a UK account which I can declare as Foreign Income on my tax return in the USA.

When we go back to Northern Ireland this coming spring we will use the money in that account to spend so we aren't getting stuck on any exchange rate - good or bad.

Now, whether or not I'm allowed to earn money in the UK while I'm waiting on my EAD is another matter. All shall be revealed no doubt. I wish this EAD would arrive soon though. Bored.

R

[mawilson 2,133]

I don't mean to be impolite, but ..... sterling is still worth MORE than the dollar. You can still bring your money over here and it's worth more than over there.

I don't think it is, on spending power it is worth less.

The parity spending power is around $1.60, ie £1 in the UK buys what $1.60 would in the US. If you get an exchange rate less than that you are in effect losing money.

Parity spending power? Where does that figure come from? Wouldn't that be something 'relative' such as what Robin talks about in her post just above hers? And would it also not be a figure that would adjust itself based upon world conditions?

May I suggest that you look at A Beginner's Guide to Purchasing Power Parity Theory http://economics.about.com/cs/money/a/purchasingpower.htm

The figure generally accepted as the parity rate between the pound and the dollar is $1.56 to $1.60 to £1

The Purchasing Power Parity index is definitely a very interesting indicator.

If you look at this chart

it becomes clear that the pound was *ridiculously* overvalued at $2.10, and now maybe

is slightly cheap against the dollar.

Note that it's still about 8 percent above $1.365, its lowest level since 1992 when sterling

left the European exchange rate mechanism. There is a good chance that it could come

to a halt above the $1.365 low, but if it doesn't... all bets are off.

[thesnowman 1]

I can feel the pain off those coming over now and looking back enviously to the former 2:1 exchange rate. However I have been here for two years now and I havent been home because the cost to do so has been painful. I tried last summer to go, but the exchange rate alongside the price of fuel made going over really expensive. It is also nice the exchange rate has dropped in the run up to Xmas as I order some of my family's presents on amazon.co.uk (to avoiding high shipping charges) and things have just got a bit cheaper.

[Stinky Monkey 1]

I can feel the pain off those coming over now and looking back enviously to the former 2:1 exchange rate. However I have been here for two years now and I havent been home because the cost to do so has been painful. I tried last summer to go, but the exchange rate alongside the price of fuel made going over really expensive. It is also nice the exchange rate has dropped in the run up to Xmas as I order some of my family's presents on amazon.co.uk (to avoiding high shipping charges) and things have just got a bit cheaper.

Well my fiance is happy about it, says he no longer has to recieve lots of parcels from ebay.com, I have really noticed a big difference

Bye bye Ed Hardy clothing

But on a serious note due to the exchange rate I will leave nearly all of my money here and just transfer over when I need it, I cant believe how much it has effected how much I planned to take over, to be honest I could have bought a car for what I planned to take and now would be able to

[Big Papa Zone 93]

Just a little update here. I'm sure you'll all be delighted to know that today, the post office will give you the princely sum of $1.33 for your pound.

Great stuff.

[mawilson 2,133]

Just a little update here. I'm sure you'll all be delighted to know that today, the post office will give you the princely sum of $1.33 for your pound.

Great stuff.

What can I tell you. Seems like it's going lower - the best you can do right now is hedge

your life in the forex market.

If you think the value of the British pound is going to continue to decline and are worried

about the value of your savings deteriorating against the US dollar, you can hedge your

savings account by going short the GBP/USD. If you have $240,000 in savings, you can

sell short 2 regular contracts and 4 mini-contracts and have a perfect hedge.

Edited January 21, 2009 by mawilson