the pound and dollar

[haden]

I know recently the US Dollar has slipped, but I always used to wonder why in the previous years the pound was always stronger than the dollar. It doesn't make sense when the US is much more wealthy and has a bigger economy. Any quick answers?

[apricot]

US economy is in a slump and there is high unemployment.

[Sylday]

I'm not sure unemployment rates have much effect on currency markets; and the US economy is certainly not in a slump. But it does have a tremendously high trade deficit with the rest of the world, and also its interest rates have been low for a long time, though are currently being raised. I think it these latter factors that have depressed the Dollar in recent years.

[haden]

Yeah I was actually referring to before the recent devaluation. Like in the early 90's the pound was always stronger.

[Bob A Job]

I think there is confusion here, The term 'strong against the dollar' is purely a refrence to its previous state. not a reference to either economy...

[Jeanalesi]

Have to agree with Bob a Job, its not the unit of currency that denotes (bad pun sorry) the value of a currency The Yen is a strong currency but currency unit for currency unit it is worth less than the Aussie Dollar.