When I first moved to the UK, the British Pound was very strong against the Canadian dollar with roughtly $2.50 getting you £1. This was great, it made coming back to Canada like going to Eastern Europe or India minus the intestinal problems. Everything was extremely cheap!
Well the gravy train didn’t last long, with the oil price sky rocketing and the Canadian economy taking off, the pound sank against the Candian dollar (see graph) to a low of about $2.00 wiping 20% off my net worth in Canadian dollars!!
Late last year things begun to turn around, just as I was thinking of coming home. The UK increased interest rates and with the hawkishness surrounding the British monetary policy committee members (compared to the Bank of Canada interest rate outlook), the Pound looked very attractive compared to the Canadian dollar and it climbed to $2.35. The tanking of the Canadian economy didn’t hurt either.
However, when the minutes from the Bank of England showed that only five of its nine members voted for the latest interest rate hike, the Pound stopped its climb and headed south.
Once a strong contender for being considered Good Stuff and all the cache which that garners it, the British Pound and its recent decline has displeased me. Come on Pound! We were so close to $2.50 again! I was going to buy every NES game ever to be released with that money.
The British Pound, you’re on notice.