The Strength of the British Pound Compared to the U.S. Dollar

Historically, the pound sterling (GBP) has been stronger than most currencies, including the US dollar. In 2007, the value of the pound reached an all-time high, doubling the value of the dollar.

The value of the pound is explained by a combination of factors such as interest rates, inflation and the general economy. The strength of GDP is mainly due to the positive role that the Bank of England plays in developing the international economy, which has a currency problem. However, in recent years, especially since Brexit, the pound has strengthened while the dollar has strengthened due to rising interest rates and fears of a financial crisis.

Main Insights
For more than 20 years, the British pound has been stronger than the U.S. dollar in nominal terms.
Brexit weakened the British pound on a structural level.
At the time, the market had little confidence in the British government. Prime Minister Liz Truss and Trusonomics added extra weight.
The jettisoning of the Truss tax cuts by Jeremy Hunt, the current Chancellor of the Exchequer, seems to have stabilized markets and consequentially halted the decline of the pound.45