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The British Pound

The document discusses the British Pound currency. It provides information on the current status of the Pound such as it trading at 11-year highs against the US Dollar. It then gives historical background on British currency and provides graphs showing exchange rates of the Pound against other major currencies over the last 120 days. The document concludes with a short-term forecast that the Pound will encounter a downtrend and a long-term forecast noting the UK's increasing trade deficit with the EU which could lead to future devaluation of the Pound.

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335 views23 pages

The British Pound

The document discusses the British Pound currency. It provides information on the current status of the Pound such as it trading at 11-year highs against the US Dollar. It then gives historical background on British currency and provides graphs showing exchange rates of the Pound against other major currencies over the last 120 days. The document concludes with a short-term forecast that the Pound will encounter a downtrend and a long-term forecast noting the UK's increasing trade deficit with the EU which could lead to future devaluation of the Pound.

Uploaded by

sdist
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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The British Pound ()

Tom Degnan Davin Costa


Tom Lacny Brian Billick
Manuel Davila

Schedule of Events

Current Status of the Pound


Historical Graphs of the Pound
Short Term Analysis and Forecast
Long Term Analysis and Forecast

Current Status of the Pound

Trading at 11 year highs against USD

1992 George Soros Man who broke the British Pound.

What is fueling the rally of the pound?


1. Strong UK fundamentals Hiking bias
2. US Dollar weakens
3. Technical Outlook
4. Short Term Fundamentals Favor Gains

Friday,February18,2005

1GBP

inGBP

AmericanDollar

1.8949

0.527732

AustralianDollar

2.40531

0.415747

BrazilianReal

4.86232

0.205663

CanadianDollar

2.32959

0.42926

ChineseYuan

15.6831

0.0637627

DanishKrone

10.7886

0.0926903

Euro

1.44925

0.69001

HongKongDollar

14.7791

0.0676632

IndianRupee

82.864

0.012068

JapaneseYen

200.272

0.00499321

MalaysianRinggit

7.20062

0.138877

20.987

0.0476486

2.61474

0.382448

12.011

0.0832569

3.10442

0.322122

SouthAfricanRand

11.25

0.0888887

SouthKoreanWon

1940.38

0.000515363

SriLankaRupee

188.069

0.0053172

SwedishKrona

13.2018

0.0757474

SwissFranc

2.24015

0.446398

TaiwanDollar

59.6136

0.0167747

ThaiBaht

73.0863

0.0136824

VenezuelanBolivar

3629.11

0.000275549

MexicanPeso
NewZealandDollar
NorwegianKroner
SingaporeDollar

History and Graphs of the


British Pound

History of British Currency

England was unified under William the Conqueror in 1066


The Pound (GBP) was introduced into England by the Normans even
before William I conquered England. The principle subdivisions of the
Pound Sterling (or Gold Sovereign) were into 20 Shillings or 240 pence,
but it was also divisible into the Guinea (21 Shillings or 1.05 Pounds),
Crown (5 Shillings), Florin (2 Shillings) and Farthing (1/4 Pence).
The Bank of England was created on July 27, 1694
The United Kingdom left the Gold Standard several times, only to keep
reinstating it until it was finally abandoned on June 23, 1972.
Throughout this time period, the rate at which the Bank of England
would buy gold remained constant at 3 pounds, 17 shillings, 10.5
pence.

Exchange rate controls were finally abolished in 1979.

(All of the above can be found at:

http://www.globalfindata.com/frameset.php3?location=/gh/index.html )

Coin

Written As

Spoken As

Circulation Dates

How expressed in s d

farthing

1/4d

half penny

1/2d

penny

1d

silver threepence

3d

groat

4d

sixpence

6d

a tanner

1550-1967

shilling

1/-

a bob

1548-1967

1s 0d

florin

2/-

1849-1967

2s 0d

half-a-crown

2/6

half a dollar

1526-1967

2s 6d

crown

5/-

a dollar

1544-current*

5s 0d

nobel

6s 8d

1464-1642

6s 8d

pound

20/-

?-current

1 0s 0d

sovereign

20/-

?-?**

half-sovereign

10/-

?-?**

10s

guinea

21/-

1663-1813***

1 1s 0d

1279-1956

hape-nee

886-1967

?-1967

thrippence

1551-1944

1279-1888

a quid

British Currency after 1971

On February 15, 1971, Britain adopts the decimal system


The change essentially made one British Pound equal to 100
pence.
The 5 pence piece replaces the shilling, and the 10 pence piece
was introduced to replace the florin
Both the half-penny and half-crown were removed from
circulation
Banks were closed for 4 days in order to fully embrace the new
currency rates

Note: Previous chart obtained from (http://gouk.about.com/cs/literature/l/blbritcurr.htm)

Copper

Silver

Smallest Coin

1p

One pence

2p

Two pence

5p

Five pence

10p

Ten pence

Small 7 sided Coin

20p

Twenty pence

Large 7 sided Coin

50p

Fifty pence

One pound or quid

Two pound or quids

Green

Five pounds or "a fiver"

Orange and grey

10

Ten pounds or "a tenner"

Blue

20

Twenty pounds

Smallest Silver Coin

Yellow

Notes

There are notes of higher denominations, but these are not so common and you probably
won't see them in general circulation.

Note: Chart and above info obtained from (http://gouk.about.com/cs/photoswebcams/l/bldecandm

BritishPoundsto1JPY

120 days
latest (Feb 18) - 0.00499321
lowest (Dec 14) - 0.00492261
highest (Nov 19) - 0.0052299

BritishPoundsto1CHF

120 days
latest (Feb 18) - 0.446398
lowest (Aug 27) - 0.434922
highest (Nov 19) - 0.464078

BritishPoundsto1CAD

120 days
latest (Feb 18) - 0.42926
lowest (Dec 20) - 0.417414
highest (Nov 12) - 0.45224

BritishPoundsto1USD

120 days
latest (Feb 18) - 0.527732
lowest (Dec 20) 0.513294
highest (Sep 7) 0.56392

British Pounds to 1 EUR

120 days
latest (Feb 18) - 0.69001
lowest (Aug 27) - 0.671001
highest (Dec 30) - 0.708792

GBP Short Term


Forecast
Current Economic Conditions
The UK has experienced 44 consecutive quarters of
expansion
Bank

of England enacted a highly restrictive monetary


policy raising rates on 5 consecutive occasions last
year
UK

faces rapidly growing trade deficit which could


force a downward adjustment in the currency . The
latest report showed a gap of 5300M GBP vs.
expectations of only 4750M

GBP Short Term


Forecast
2005 Implications
Short

GBP futures not pricing at a rate hike over the


next year
Bank

of England has the option of materially easing


monetary policy should growth in UK rapidly
deteriorate.
Large

interest rate differential between GBP and USD


has raised speculative positions from carry traders.
Increases volatility and speculation effect on currency
value.

GBP Short Term


Forecast
Prediction
The British Pound will encounter a short term
downtrend

Great Britain Pound


Long-Term Forecast

UK Trade

3.0 billion deficit in Dec 2004

http://www.statistics.gov.uk/CCI/nugget.asp?ID=199

The Numbers
BALANCE OF PAYMENTS AND TRADE

Period Release date

UK's trade balance ( billion)


Balance of Payments current account - BoP ( billion)
of which: EU
non-EU
Goods export volumes excluding oil and erratics

4-Dec
Q3/04
23/12/04

4-Dec

(Billion)
9/2/05
-3
-8.8
-6.4
-2.4
9/2/05

104.4

http://www.statistics.gov.uk/instantfigures.asp

The Facts

The deficit on trade in goods in December was 4.4 billion 0.3


billion less than the deficit for November. The deficit with the
enlarged EU worsened to 2.4 billion
The value of exports to non-EU increased across a wide range of
manufactured goods. As a result the deficit with non-EU countries
improved to 2.1billion.
The European Commission has announced its support for 10 more
countries to join the EU from the beginning of 2004.Taken
together these countries accounted for 2% of UK exports and 2%
of UK imports in 2001.

The Bottom Line

Increasing Trade Deficit with the EU


Increasing number of countries that
trade with the UK are joining the EU
Could lead to an increase in trade
deficit in the future - which would
mean excess supply and devaluation

CITY GUIDE TO A UK EURO


CHANGEOVER

CHART1:AUKEUROCHANGEOVERNotes:D=Governmentdecision
tojoin;R=Referendum;T=UKentry:fixedconversionrate;sterling
wholesalefinancialmarketsineuro;RT=fullscaleretailpaymentand
transactionprocessinginfrastructureandservicesavailable;E=endof
transitionperiod;euronotesandcoinintroducedaslegaltenderintheUK;S=
endoflegaltenderforsterlingnotesandcoin.
http://www.bankofengland.co.uk/Links/setframe.html

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