Thursday 14 October 2010

Currency Wars: GBP, AUD

Here are the charts for British Pound and Australian Dollar against a basket of currencies since 1990:

My latest blogpost: Currency Wars: GBP, AUDTweet this! Posted by Mark Wadsworth at 09:30

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6 comments:

Steven_L said...

From 1990 huh?

Talk to a few coffin-dodgers and ask them how many dollar per pound they used to get back in the day!

Sterling just goes down and down and down. It used to be a pound of silver didn't it?

14 October 2010 at 11:31
Mark Wadsworth said...

SL, but they both follow the general rule that currencies go up and down between 0.8 and 1.2. AUD is near the top and GBP is jsut below the bottom of that range.

In 2001 it was the other way round, so the net effect is that GBP has halved (or AUD doubled) in nine years. But compared to 1997, GBP is only ten or fifteen per cent down. And so on.

14 October 2010 at 11:37
James Higham said...

Yes, I've been following the AUD for some time, for particular reasons. Interesting, huh?

14 October 2010 at 11:49
Mark Wadsworth said...

JH, problem is, you've missed the boat. If anything, now is the time to covert AUD back into GBP.

14 October 2010 at 11:52
John B said...

Hmm. I'd agree in general, but there are reasons to think the AUD will remain above its historic (1990s) GBP exchange rate:
1) the UK soon won't have any oil
2) Australia will continue to be a major resources exporter under almost all plausible world economy scenarios

15 October 2010 at 03:58
Mark Wadsworth said...

John B, just for clarity, the scale on that chart is relative to the average strength of the currency itself, i.e. the long run average of each currency is 1.0.

So even if AUD does particularly well in future, it will still swing up and down round about 1.0.

15 October 2010 at 07:42

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