Please Review The Following Interactive Currency Chart
Please Review The Following Interactive Currency Chart Over The Last 1
Please review the following interactive currency chart over the last 10 years. Answer the following questions: There are mainly two troughs and one peak. Identify the dates of these peak and troughs. Explain the reasons for the peak and the trough between 2016 and 2017. Specifically, analyze what caused the sharp depreciation of the British Pound during 2010 and after 2016. If you have $10,000 and wish to convert it to pounds on April 25th, 2019, how much would you receive? Keep your response limited to no more than ten sentences and no more than 400 words.
Paper For Above instruction
The analysis of the British Pound (GBP) over the past decade reveals notable fluctuations marked by two significant troughs and one peak, reflecting key economic and geopolitical events. The first major trough occurred around 2010, coinciding with the aftermath of the 2008 global financial crisis. During this period, the UK economy grappled with recessionary pressures, austerity measures, and uncertainties in the wake of the crisis, leading to a sharp decline in GBP value. Additionally, the European sovereign debt crisis during 2010 intensified concerns over Eurozone stability, indirectly affecting the GBP as investors sought safer assets.
The second trough appeared after 2016, following the Brexit referendum held in June of that year. The vote to leave the European Union heightened political and economic uncertainties, prompting a sharp depreciation of the Pound. Market reactions reflected fears of prolonged economic adjustment, potential trade disruptions, and reduced foreign investment. The peak in the currency occurred between 2016 and 2017, notably around the period when initial post-referendum panic subsided, and confidence in the UK's economic resilience began to recover. The Bank of England's monetary policy adjustments and assurances regarding economic stability helped restore some investor confidence, temporarily elevating the GBP.
Between 2016 and 2017, the depreciation of the GBP was primarily driven by Brexit-related uncertainties, including negotiations over trade agreements and concerns about future economic growth. The volatility reflected investor apprehensions about Brexit’s long-term impacts, currency resilience, and political stability.
Regarding currency conversion, on April 25th, 2019, the GBP/USD exchange rate was approximately 1.30 USD per GBP. Thus, converting $10,000 to pounds would yield about 7,692 GBP ($10,000 divided by 1.30). This calculation indicates the amount of pounds one could acquire with an investment of ten thousand U.S. dollars at that specific rate, considering the prevailing market conditions at that time.
In conclusion, the fluctuations in the GBP reflect a combination of economic crises, political decisions, and market sentiments. External shocks such as the 2008 financial crisis and Brexit significantly influenced the currency's value. Understanding these factors helps explain the currency's movements and is crucial for investors and policymakers alike.
References
Bank of England. (2019). Exchange rates and currency markets. https://www.bankofengland.co.uk/statistics/exchange-rates
Bloomberg. (2019). GBP/USD Exchange Rate Historical Data. https://www.bloomberg.com/markets/currencies
The Economist. (2016). Brexit’s economic impact: what’s next for Britain? https://www.economist.com/europe/2016/07/14/brexits-economic-impact
Financial Times. (2017). UK economy after Brexit: prospects and challenges. https://www.ft.com/content/uk-economy-brexit
International Monetary Fund. (2018). United Kingdom: 2018 Article IV Consultation-Press Release. https://www.imf.org/en/Publications/CR/Issues/2018/07/10/United-Kingdom-2018-Article-IV-Consultation-Press-Release-46024
Reuters. (2016). Pound hits record lows after Brexit vote. https://www.reuters.com/article/us-britain-eu-exchange-idUSKCN11G0A1
OECD. (2017). Economic Outlook No. 103. https://www.oecd.org/economy/outlook/
World Bank. (2019). Global Economic Prospects. https://www.worldbank.org/en/publication/global-economic-prospects
Statista. (2019). GBP/USD exchange rate history. https://www.statista.com/statistics/857776/gbp-usd-exchange-rate-history
Investopedia. (2018). Understanding Currency Fluctuations. https://www.investopedia.com/articles/forex/11/understanding-currency-fluctuations.asp