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Understanding The Exchange Market Rate Pound To Us Dollar (Gbp/Usd) Exchange Rate

3315 words - 13 pages

The fluctuation or well known as the exchange market is the rate at which one currency will be exchange for another. It also regarded as the value of one country’s currency in the terms of another currency. The fluctuation was determined in the foreign exchange market (Wikipedia, 2014). The fluctuation rate is not permanent sometime in one day the fluctuation rate can change from high to low and from low to high.
Hard currency is any global traded currency that is expected to serve as a reliable and stable store of value. The factor contributing to a currency hard status might include the long term stability of its purchasing power, the associated country’s political and fiscal condition and outlook and policy posture of the issuing central bank (Wikipedia, 2014). The two currency that can be taken as the hard currency was the United States Dollar and also the Great Britain Pound. These two currency is very popular and also important in the way to contribute to the exchange rate in foreign exchange market
The United States Dollar (USD) or its sign was ($) is referred to as the U.S Dollar, and also as the American Dollar. It is the official currency to the Unites States and its overseas territories. The currency of United States Dollar was divided into 100 smaller units called cents (Wikipedia, 2014). The United States Dollar is often used in the traded process because of its high value. There were five major reason of why the U.S Dollar is so widely used in the traded. The reason is as below:
• It’s an investment currency in many capital markets
• It’s a reserve currency held by many central banks
• It’s a common transaction currency in many International commodity market
• It’s an invoice currency in many contracts
• It’s an intervention currency employed by monetary authorities in market operation to influence their own exchange market.
The Great Britain pound (GBP) (£) or simply known as the pound is the official currency of the United Kingdom. The GBP was subdivided into 100 pence or penny. A number of nations that do not use sterling also have currency that called the pounds (Wikipedia, 2014). The rate of GBP is originally lower than us dollar but the exchange in the foreign market change the condition and until now the GBP value is higher than the US Dollar
There were a difference that happen in the fluctuation rate between the US Dollar and also with the Britain Pounds. The trend also change from time to time. As shown in the exchange market chart, for the month of March the fluctuation between the U.S Dollar and Britain Pound is uncertain sometime the rate is high and sometime is low.
As shown in Appendix A that the changes graph of between U.S Dollar to Britain pound and the rate is between 6 march 2014 until 31 march 2014. As shown in the graph the fluctuation rate is uncertain. When its start in 6 march the amount of 1 GBP when change to USD the amount that was get is $1.67405. But at the end of day for 7 march the...

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