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Home Blog UK Pound tumbles against Zimbabwe Dollar

UK Pound tumbles against Zimbabwe Dollar

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The UK pound has not done well against most currencies, even including the shaky Euro, but who realises that for the past two months it has been tumbling down against the Zimbabwe Dollar? Should Osborne and Mervyn King be asking for advice from Harare?

But confidence in Britain's economic policies is neatly summarised in this diagram showing the exchange rate of the UK pound against the Swedish Krona over the past 12 months.

The SEK is a good measure because the Swedish government has practised little of the fiscal jiggery-pokery known as Quantitative Easing and the currency has not been affected by the troubles with the Euro. After a peak of SEK 11.8 to the £ in March, the £ fell on the run-up to the general election, and then recovered most of its value, to a second peak of around 11.75 in May and June. Since then it has fallen most of the way, to 10.4 at the end of 2010, a drop of 12%. The true extent of this inflation is more, as it should not be forgotten that Sweden itself has suffered from some inflation.

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It is worth bearing in mind that Sweden suffers badly from a raft of geographical disadvantages including an inhospitable climate, a small and sparsely distributed population and distance from the great centres of Europe where the markets are. The drop in value has obviously done nothing for British exports to Sweden; they are not much in evidence in the shops, with the exception of Fisherman's Friends! If the UK cannot sustain the value of its currency against a country like Sweden, the people responsible ought to fall on their swords.

The story with the troubled Euro is much the same, again with a strong downward trend for the past month.




Or even the Latvian Lat, for heaven's sake



As for the Swiss franc, this diagram tells its own story



and here is how much silver the pound in your pocket will buy

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Are the foreign exchange markets trying to tell us something?

Tables from xe.com
 

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