Inflation has lead to the pound to get even stronger I don't really understand how this can effect the UK?
well, as I'm reading now, inflation has lead to prices in the UK to rise which isn't good. Inflation rises every year but looks like this year it's a big amount.
The pound is hovering just over 2:1 for the dollar, that is up from 1.7:1 a year ago. Basically, you should see a lot of money flowing from GB into the US markets.
It is quite simple If you get paid in dollars from the likes of google then you now get less if you are in the UK. $10000= £6944 in 2002 $10000 = £5347 in 2005 $10000 = £5000 today Inflation is up, interest rates are about to rise as will mortgages, it is all relative.
Trust me, it's partly because of that, the strength of a currency always go down when there is a war. US are sending soo many troops and spending money.
so lets say I have $ in my PayPal account, do you think it is good to transfer the money to my bank (in UK) which is in pound?
How do you go from asking a question to disputing my answer? Its just typical market flux. I'm sure it will be back to 1.85 in less than a year.
Which is why people from the UK shouldn't rely on US payouts only, apart from adsense I never know why people from here are using US affiliate networks when you can use a UK network and get double the amount. I hate the fact my adsense earnings go down constantly because of the pound to dollar difference but at the same time it evens itself out because i earn money offline in pounds which then doubles when i use it for spending online.
In practice you would be buying pounds, so if you think that the exchange rate is going to change soon in "favour" of the pound, that is the pound going further up, then the answer is a definite yes. But if you believe that the dollar is going to come back soon, it would be better to hold out and wait until that happens, because you would be able to buy more pounds with your paypal dollars!
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What I know is that inflation will lower the strength of a currency. this sounds like moving on the oppostite direction.
Generally they fight a rising inflation increasing the national interest rate (thus putting people and businesses off borrowing, thus reducing their expenses, thus reducing prices, thus reducing inflation). But if there's deflation (prices going down) they might decrease the rate so people borrow and then spend driving up to inflation, which is, if reasonable, good, better than deflation or stagnation. So, inflation driving rates up, mean that borrowers are going to avoid spending and investing, but investors from other countries will come in and invest as the growing/high interest rates work in their favour. Buying poundsto invest that would cause the pounds to go up, so to strengthen the currency. That's basically how it works About England, think about the services sector of the economy and how much foreigners have invested in them, including Football Clubs. That's one of the reasons why the GBP is up, and it doesn't look as it's coming down soon, unless Gordon Brown scares all the investors off, which is likely if he comes to power...
not really, in the news they were talking about the INR getting stronger, it has risen by about 10% in the last 6 months etc.........$ is dropping against every currency in the world, i used to get about 47 to 1$, now i get less then 40.