The British Pound is now trading at its third lowest value to USD since 1791
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I feel like a total idiot here and obviously I'm not understanding something.
If I google it 1 Dollar equals .75 Pounds, so how does that make something like a UK trip a good idea? Do folks in the UK lower the prices of things? Or is inflation soon to come? To my idiot mind it seems like I'm losing a quarter just to get a pound.
If I google it 1 Dollar equals .75 Pounds, so how does that make something like a UK trip a good idea? Do folks in the UK lower the prices of things? Or is inflation soon to come? To my idiot mind it seems like I'm losing a quarter just to get a pound.
Ah, I'm really sorry, but I quoted the wrong person. I didn't notice because I'm browsing desktop GAF on mobile.
Sorry campfire
$1 buys you more £ than it could before. This is good for you, because you get more for less.
This is not good for British folks though, because they get less for their £.
If I show you a good burger place, will you feed me dollar man?
A Big Mac costs 2.89 pounds in the UK.
Last week, 1 US dollar equals 0.68 pounds. So the Big Mac would cost you $4.25.
Today, 1 US dollar equals .75 pounds. So the Big Mac would cost you $3.85.
Imagine the same thing applied to hotel rooms, other restaurants, plane fares, etc.
It feels like it buys less pounds though? To me it would make sense if 1 Dollar was worth 10 Pounds, then you are getting a lot of pounds for just one Dollar. but 1 to .75 seems like my dollar can't even buy a full pound.
zswordsman
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lets say for example that before, 1 dollar would get you .50 pounds.
now, due to the weaker uk currency. 1 dollar gets you .75 pounds. You get more local money (UK pounds) for the same amount of foreign (USA) currency. So its cheaper for you to visit.
What would happen if Scotland blocked the brexit through legal parliamentary trickery? Roughly half of the nation would despise Scotland forever. But the clever half might appreciate the save? I imagine the blinkered racist troglodytes who voted for Leave through sheer ignorance probably hate Scotland anyway.
zswordsman
Member
thats because.... you can't. The pound is still a stronger currency than the dollar. So is the Euro.
for example, It's like trying to buy dollars with pesos. You're gonna need 20 pesos for just 1 dollar, because the mexican peso is a weaker currency. it's not that complicated man :/
It is still a better deal, not sure how you are missing this.
Ignore the actual number. 1 Dollar and 1 Pound have nothing to do with each other. 1 Dollar = .75 Pounds doesn't mean you're losing a quarter.
What matters is changes in the relative value.
So if 1 Dollar = 1 Pound yesterday, and now 1 Dollar = 1.10 Pounds today, you get more for your money today.
Same with 1 = .68 → 1 = .75
I may be wrong, but a currency isn't "stronger" just because one is at a higher number in the exchange versus the other. 1 Mexican Peso buys 5.4 Japanese Yen--that does not mean that the Peso is stronger than the Yen.
It's cause I'm clueless. I was thinking the dollar was stronger than what it was. But now I'm getting it. Thanks everybody!
*I for one blame my American education.
SwiftDeath
Member
zswordsman
Member
true but lets not over complicate things for biske, it was more of a comparison. plus, isn't Japan like a special case because they keep their exchange rate low on purpose?
It might help if you think of it in the opposite way.
Before Brexit, £1 = $2AUD, roughly. After Brexit, £1 = $1.80AUD. Before Brexit, prices were pretty well equivalent, so if I were to order something from the UK, it'd cost me about the same as if in AUD if not more expensive.
After the pound dropped, I ordered a GTX 1070 from Amazon UK, and it cost me $670AUD with shipping. Had I ordered the same card from an Australian company, it would have cost $820 with shipping. Because the pound is still getting weaker against the Australian dollar, but the listed price is staying the same, it's getting cheaper for me in Australia to order things from the UK than it is to buy it locally
Edit: I'm too slow XD
Before Brexit, £1 = $2AUD, roughly. After Brexit, £1 = $1.80AUD. Before Brexit, prices were pretty well equivalent, so if I were to order something from the UK, it'd cost me about the same as if in AUD if not more expensive.
After the pound dropped, I ordered a GTX 1070 from Amazon UK, and it cost me $670AUD with shipping. Had I ordered the same card from an Australian company, it would have cost $820 with shipping. Because the pound is still getting weaker against the Australian dollar, but the listed price is staying the same, it's getting cheaper for me in Australia to order things from the UK than it is to buy it locally
Edit: I'm too slow XD
Appreciate it, every bit helps! It's a lot clearer now. At least this bit of it.
I'm tempted to ask why Australia is so expensive but along with killer bugs and animals and everything, I think we can all agree just not to go there.
WhiteRabbitEXE
Member
Does such Scottish "legal parliamentary trickery" actually exist as an option? How would/could that work?
axisofweevils
Holy crap! Today's real megaton is that more than two people can have the same first name.
Scotland voted remain and being in the EU was one of the reasons they decided not to go independent. Now, the rest of the UK is forcing them to leave against their will. Therefore, if they could block it, it would be good for them.
Its better than it used to be
Technology, as a rule, is really expensive here, alas
But it's also that the Australian dollar is weaker than the US dollar. $1USD = $1.35AUD. So the $670 I paid was $495USD (which is a little more in line with the US prices I see on Amazon) But, when we were at parity/worth more with the US dollar, the prices didn't change so it was a hell of a lot cheaper to import from the USA ($40 for a Vita game imported versus $60 buying locally).
WhiteRabbitEXE
Member
immigration is evidently not simple, not to mention that japan is probably one of the most difficult countries to properly integrate into. also immigration doesn't solve any problems it just postpones them. unless of course you think perpetual growth sounds sustainable. the real problem is how to create a society and economy where the population doesn't need to grow and naturally normalizes at healthy levels.
not to say that I'm against immigration, but I strongly believe the extent should be decided by the countrys capacity to properly assimilate and integrate those people rather than whatever number maximizes economic growth short term. proper integration/assimilation costs money and resources so obviously those numbers are going to be much lower than in european countries today, but that's the only sane approach to this issue.
i'd like to buy 10 dollars for a dollar. hook me up, fam
WhiteRabbitEXE
Member
Yeah, you really can't look at two currencies like that, just 1:1 comparing the numbers like that, because it doesn't quite work that way. It's better to think of it like unit conversions, only the conversion ratios aren't permanently set in stone.
For those wondering about the historic value of the GBP/USD:
Holy shit did that Civil War kill the dollar for a bit there, hahah. Not remotely surprised, but I'd never seen that chart or anything similar.
Sort of. The Scots could refuse to accede to the exit via a parliamentary tool but that refusal could be easily overruled if that's what the government chose to do. Sorry I can't point to the rule, was listening to it on the radio.
WhiteRabbitEXE
Member
Huh, interesting. So I guess it's kind of an option for a protest maneuver, with a little more weight?
Either way, Scotland is certainly going to be interesting to follow for the next few years.
efyu_lemonardo
May I have a cookie?
For those wondering about the historic value of the GBP/USD:
Wait, so the pound was worth over 4 dollars in 1791? Then what makes that year relevant to this comparison? Is it just the earliest year the two currencies were tracked against each other?
Jezbollah
Member
Yep I think a bit of context is needed when people say "since 1791" - it would be more accurate to say "in recorded history"
SomedayTheFire
Member
it's at €1.20 now right. I'v read forecasts see it going down to €1.13 or so? that's ridiculous.
Acidote
Member
HSBC analysts said under €1 by the end of the year, but that was right after the referendum when panic mode was on everywhere.
show me your skeleton
Member
For those wondering about the historic value of the GBP/USD:
forgive my ignorance but what happened in 1863 to make it so strong?
edit: ah that little event known as the american civil war. makes a lot of sense.
WhiteRabbitEXE
Member
The American Civil War tanked the dollar.
show me your skeleton
Member
aye, feel dumb now.
in my defense we're not taught about this in school here in the UK.
in my lack of defense i left school about 15 years ago and have the internet.
Laevateinn
Member
James Clerk Maxwell unified electromagnetic theory temporarily making the UK the greatest place in the world.
To be fair, the Nikkei denominated in USD is stable, up even. In JPY....
That graph isn't GBP:USD. It's the "market cap" of the two currencies, not the exchange rate.
efyu_lemonardo
May I have a cookie?
But it says "Dollar - Pound Exchange Rate from 1791"..
Link
The Autumn Wind
USA! US--- wait...
Because something that costs $100 in US won't cost £100 in UK...it'll cost you like £70 due to the fact that pound has a higher value than USD.
Imagine a fancy hotel that charges you £70 a night, in the past for $100 you could get £50...so you would need to spend more than $100 to cover the cost since $100 only buys you £50.
But now after the drop, $100 can buy you £70...so you don't have to spend any more than $100 for that one night.
But it doesn't mean the goods and services in Mexico are 20 times cheaper just like it doesn't mean the cost of goods and services in the UK are 1.25 more expensive. You can't just translate currency and apply the same amount to items. A Big Mac in Mexico is not going to be 5 pesos. It's still going to be $4 worth of pesos.
Superman00
Liverpool01
Because the US dollar wasn't created until 1785.
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