Dollars to pounds

A dollar is a widely recognized form currency whose fame is mainly associated with the United
States of America’s economics. However it is also the official currency form for other countries
like Canada, and those in the Caribbean territories like Ecuador, Hong Kong, Panama, Taiwan
most of whom have Spanish relations, though the values do differ in the international markets.
The dollar is normally represented by the sign $.

The pound on the other hand has its origin from the British Empire which is basically the United
Kingdom and is older than the dollar in age. Despite this there are also different interpretations
of the word pound; an example is in Kenya the word pound initially meant twenty shillings or
basically anything equal to twenty. This could be having its routes to the fact that before the
realization of decimals, a pound was divided into twenty shillings and each shilling was also
divided into twelve pence. However it is also the official currency in most British colonies which
are islands in Europe.

Together the dollar and the pound are well renown currency powerhouses and used in most
World economics forums and as ways of harmonizing the other less known currencies. The
dollar is the most traded currency in the world’s foreign market. The sterling pound is the
fourth most popular currency after the Japanese Yen, euro and of course the dollar. Currently
the pound is 1.2265 against the dollar and this is viewed as a slip.

The sterling pound has been most of the periods struggling to counter the gains of the dollar in
the world market. Though as much the pound has been very stable in the market more than the
dollar because the American dollar is most of the times affected by world’s inflation and money
volatility. The volatility associated with the dollar can be pegged on issues such as fluctuating oil
prices that are usually measured as dollars per barrel.

The general use of these two currencies side by side has helped create a sense of security
where none can ultimately be used singularly though the dollar may prove more widely
accepted currency. The dollars to pounds ratio helps determine the prices of many goods and
services on offer in international markets. In small and underdeveloped countries such as those
found in Africa, the dollar to pound ratio may go as far as affecting macroeconomic variables
such as inflation. Most of these countries rely heavily on international aid that may come in
dollar or pound form and such any changes in these two currencies ultimately affect them.

I the foreign exchange market, for years, until the introduction of the Euro, the dollars to
pounds ratio helped in determining of the exchange rates of other World currencies i.e. the
rate of dollars to pounds acted as a reference point in the determination of the forex markets
exchange rates.
In conclusion, it is important to note that the dominance of these two currencies has not
stopped emerging markets and other rapidly developing nations such as China, coming to the
fore and claiming a stake in the forex markets.