Thus far, the Pound Sterling has never retaken the level again. The Pound rebounded towards the $5 level and even briefly breached, topping out at $5.04 in 1934. Globally, the standard collapsed between 19. The collapse of the coal industry in 1925, exacerbated by a 6-month miner strike in 1926 prompted vast, protracted, unemployment and and coupled with persistent deflation prompted economic slide culminating in a savage run on the Pound in 1931 at which point the the Gold Standard was abandoned for a second, and final time. The advent of the Great Depression in 1931 meant that the gold standard had to be abandoned."ġ930s – 1971: WWII, the End of the Gold Standard the Bretton Woods Arrangement The abandonment of the gold standard and the financial burden of the Great War saw the GBP/USD decline to $3.66.įormer hedge fund manager and head of research at QuotedData, James Carthew, wrote, “The expense of the First World War took its toll on sterling as the currency was allowed to float, but Britain returned to the gold standard in 1925.
For the US Dollar, the US Civil war (1861 – 1875) saw the Dollar depreciate vastly, sending the spiking to $10 to the £1.Įntering the 20th century just shy of $5, the next big development for the cross saw the Sterling come under pressure during World War One (1914 – 1918). The early 1800s for example saw the Pound Sterling depreciate against the Greenback to $3.62 during the Pound-weakening Napoleonic wars (1803 -1815). The 1800s saw the Pound Sterling to US Dollar (GBPUSD) exchange rate by and large maintain a rate of around $5 to every £1 with the notable deviations from the rate seen to be aligned with periods of war. While it’s unlikely the time frame of your FX charts or analysis spans the last 200 years, we’re taking a look at the tumultuous historical relationship between the Pound Sterling and US Dollar ( GBP/USD) which has seen the GBP depreciate from $5 to the current level of $1.29, a massive 74.2% decline.Ībove: Nominal GBP/USD Exchange Rate Since 1791 It’s easy to get up in the day-to-day developments which make it ever more important to take a step back and remember that recent moves represent the very tail end of an over 200 year relationship. Post-EU referendum price action for the Pound Sterling (GBP) has seen GBP-crosses swing rapidly, often by upwards of 1% per day as markets react to a constant stream of Brexit related developments. Pound Sterling to US Dollar Exchange Rates Over 200 Years
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