3 Tips for Predicting How the US Dollar Will Fare Against Pound Sterling
In history, the British pound has been worth more than one US dollar. This is despite the UK having a much smaller economy. The British pound, however, does not fare so well against the Kuwaiti dollar because that is the strongest currency in the world. This has been the case for a while and is all about the amount of oil that Kuwait can export. This has strengthened the economy in Kuwait compared to others around the world. To have one of the largest global reserves when oil continues to be in such great demand is only going to see their economy grow.
So, let us look at what factors we should consider in our predictions as to how exchange rates may change in the future concerning the dollar to pound rates. This will help us to come up with some tips so that we have some understanding as to the best moments to exchange currency in one direction or the other.
Be Aware How Well a Country’s Economy is Performing
The first tip is to know how a country’s economy is performing and the direction it is heading in for the future. There is no doubt, though, that Covid has created more uncertainties than ever. It has, however, allowed us to see which industries survive better in a pandemic. For example, essential products like food aids the survival of those businesses, the hospitals are busier than ever, and anyone working with computers will have seen more people shopping that way and traders wanting services to help them convert to this method of trading to survive. We are talking about an expansion of digital services here.
The best way to find out about a particular country’s economy is to watch, listen, and read the news. Particularly study the financial newspapers, whether online or in print form. How the large companies that are based in particular countries are performing will impact that country’s overall economy, and therefore their exchange rate.
We should know that America’s main industries relate to petroleum, motor vehicles, steel, aerospace, chemicals, telecommunications, food processing, electronics, lumber, consumer goods, and mining. Following the performance of companies in these key industries in America will be important to know how their economy might affect the exchange rate between America and Great Britain. That is, of course, if you also know the main industries of Great Britain and how they are performing. We are, after all, comparing one country against another. Great Britain’s main industries are services, construction, manufacturing, and tourism. Covid has hit tourism, so you might say that is a plus on the American side.
View Online Exchange Rates
For our second prediction tip, we can look to online exchange rates to help us. Websites will plot their performance over time. More importantly, we can obtain an instant exchange rate to help us know whether the time is right for currency exchange.
To an extent, we cannot always time our currency exchanges how we might like to. They have to be made, for instance, within invoice payment deadlines, if we are a business, or before our holiday if we are a tourist. Investors might need to sell early for financial reasons. However, we have so much grace period before we have to pay as a business, holidaymakers can plan well in advance of their holidays and spread out their exchanges of currency, and investors can spread their investments between different currencies, rather than invest in just US dollars or pound sterling.
Be prepared to be patient to wait for the right time to exchange your money. Do you, for example, wait until the exchange rate has almost hit an all-time high or wait a bit longer? It should be an informed decision to make. We all know, to some extent, how suddenly we can be faced with something unexpected such as not just an epidemic but a pandemic. So, some caution would be advised here, and when an exchange rate looks relatively good in comparison to another, it might well be time to make that exchange sooner rather than later.
To summarise, our tips for predicting the US dollar against Great Britain’s pound sterling would be to know how both economies are performing at any one time, to constantly view exchange rates online to see how they are changing, and to exercise patience where possible. Planning will help as well when looking to make good decisions based on the information we now have available through the internet.