There are few most traded currencies in the world. To name a few are US dollar, euro, Japanese yen and one of these are pound sterling. Pound sterling is the currency of UK .The symbol of pound sterling is £.It is very commonly known as British pound. 100 pence constitute one pound. The IMF updates the UK Pound Sterling Exchange Rate.
The fluctuation of pound sterling is majorly due to fluctuation of euro. Inflation, interest rates, demand and supply of money, purchasing power of the people are few of the factors which lead to fluctuation of a currency. Similarly UK Pound Sterling Exchange Rate also fluctuates because of these factors and many other factors which arise due to change in the economic conditions of a country. Way back in 2006 due to widespread inflation , bank of England was forced to cut interest rates .Due to cut in interest rate the value of UK Pound Sterling Exchange Rate appreciated Vis-à-vis other currencies. Due to the fall in interest rates people tend to have more purchasing power and there exist a demand for more food and commodities. This in turn brings about prosperity for the country. On the macroeconomic side, due to cut in interest rate the currency tends to appreciate because of rise in exchange rate. This is what exactly happened with UK Pound Sterling Exchange Rate Vis-à-vis US dollar. Pound sterling appreciated to a large extent. But this appreciation did not last too long. Pound Sterling Exchange Rate eventually fell down due to the global financial crises in December 2008. This fall and rise in exchange rate happens due to macro economic factors.
Pound Sterling Exchange Rate can be calculated using an exchange calculator which gives very accurate figures. The exchange rate is of prime importance for people who trade with various countries to buy goods and services. There are two rates by which trading of currencies takes place. These are spot rate and forward rate. Spot rate is the rate at which currency is traded on a particular time. Forward rate is the rate which is locked for future irrespective of the future price. Bank of England provides with valuation of a currency Vis-à-vis the pound sterling. This valuation is done every day and may show significant movement. It is very important to get a proper estimate of exchange rate because it provides with BOP and balance of trade, balance of capital which represents the country’s economic growth.