Author, Andrew Gibson
Below you will find out the highs, lows & trends of the British Pound to US Dollar rate, why you should be wary of forecasts, and how to achieve a better rate.
Highest GBP to USD rate ever
The Pound to Dollar rate reached a high of $2.649 on 6th Mar 1972.
That remains the strongest the Pound has been against USD since it freely floated in 1971.
Prior to the 1970s, the Pound to Dollar rate was fixed at a level set by the British government.
For much of the 1800s and early 1900s, the rate was maintained at around $5 for every £1.
In 1940, the British government devalued the Pound to around $4 for every £1. Two further devaluations occurred in the 1960s before the Pound became a freely floating currency in 1971.
Lowest GBP to USD rate ever
The Pound to Dollar rate reached an all-time low of $1.054 on 25th Feb 1985.
The fall in the rate was more a function of US Dollar strength than British Pound weakness.
A doubling in the oil price led to high inflation in the 1980s. To combat inflation, the US Federal Reserve raised interest rates above 20%. This led to huge international capital inflows into the US and a surge in the value of the Dollar.
Is GBP stronger than USD?
In basic terms, £1 is worth more than $1.
So at face value, you could say the British Pound is stronger than the US Dollar.
However, the value of one currency compared to another is not a true indicator of strength, wealth or power.
A better way to measure a currency’s strength is through its relative movement over time.
Over the past 50 years, the Pound has halved in value against the US Dollar.
How did Brexit affect GBP to USD?
The British Pound fell 13% against the US Dollar in the two weeks following the Brexit referendum.
The Pound fell in value as Brexit created uncertainty in the UK for trade, emigration and the legal system going forward.
How did Coronavirus impact GBP to USD?
The GBP to USD exchange rate fell 12% within the space of two weeks in March 2020.
Investors sold the Pound in favour of the perceived safety of the US Dollar.
Why most GBP to USD exchange rates you see are often ‘fake’?
It’s easy to get a GBP to USD exchange rate off the internet these days.
There are also dozens of websites such as XE, FX Street, Oanda and Daily FX, that provide ‘live exchange rates’.
But here’s the problem…
The GBP/USD rates you see online are something called ‘interbank rates’. They are not customer rates.
Interbank rates are used by banks to exchange currencies with other banks.
So unless you’re a bank, the rates you see online are not applicable to you.
This important fact is normally hidden away in a disclaimer (look for small writing).
I’ve also found a lot of the online comparison sites aren’t showing real rates either.
They get paid for the ‘click’, so seem to be displaying teaser rates that are once again not achievable once you go through all the hassle of signing up.
When it comes to exchanging your money in the real world, customers are often being misled.
My point is if you are looking to convert Pounds into US Dollars, it’s best to request a quote from a bank or currency broker.
That way, you can budget effectively and avoid being deceived.
GBP to USD chart (last 50 years explained)
GBP to USD history in a nutshell
- You can see the extreme highs the GBP to USD rate reached in the early 1970s.
- By the mid-1980s, the GBP to USD rate fell to all-time lows.
- Overall, the trend in the GBP/USD rate has been down over the last 50 years. The rate has effectively halved in value.
- Volatility is less extreme today than it was in the 1970s and 1980s.
- Most of the big moves you can see above were triggered by major events.
- There’s usually at least one ‘major event’ per decade.
- The major events have varied from wars, natural disasters, financial or political crises, and more recently, Coronavirus.
Can you trust GBP to USD forecasts? (Hint: No)
Let’s be honest; we all want to know what the future holds.
It’s human nature.
When it comes to exchange rates, it’s no different.
We don’t want to exchange our money at the wrong time, because a bad exchange rate could cost you a lot of money.
A word of warning: just because a forecast is on the internet, it doesn’t mean you can rely on it.
I work in the industry, and I can tell you that in most instances, exchange rate forecasts are a load of rubbish.
Don’t be fooled by baffling terminology or complicated jargon.
A forecast is always just one person’s opinion.
And you can always find an expert to argue either side.
The more precise a Pound to Dollar forecast, the less I would trust it.
There are, of course, trends and price patterns in all financial markets.
And yes, they can be turned to your advantage.
Getting the best GBP to USD rate
Timing matters when it comes to exchange rates.
You can see from the GBP to USD chart that exchange rates frequently can have large swings.
These swings can make a big financial difference to you.
No matter what your timeframe – a day, a week, a month or a year – there will always be highs, lows and turning points.
As a currency broker, we work with our clients to achieve a more favourable exchange rate.
It’s not possible for most people to watch the rate all day.
And as many people are unfamiliar with foreign exchange, they may not be confident picking the right time to exchange their money.
One advantage of speaking to a currency broker is that they can monitor the GBP/USD rate for you.
It may be that you are targeting a specific rate.
Or you may just want to know when the market moves in your favour.
Unless you are glued to the screens, you can very easily miss the best opportunities.
Please note – banks and most money transfer companies don’t help their customers with their transfer.
They will facilitate your payment, and that’s about it.
You’re left to do the rest.
I know from experience, many people are not comfortable using an app or online system.
It adds stress to the situation.
By understanding your individual requirements, we can work with you to achieve a better rate, rather than using a bank or online platform and having to accept whatever rate they give you on the day.
Who are we?
Key Currency is one of the UK’s leading currency brokers.
As an independent currency specialist, we have far lower overheads than the banks, enabling us to pass on the savings to you.
Our exchange rates are highly competitive and we charge no fees whatsoever.
And unlike banks and online-only systems, we don’t make you do everything yourself.
We offer all our customers personal assistance with their transfers and can offer guidance on exchange rates and timing.
It makes the whole process a lot easier for our customers.
We have attained a 5-star “Excellent” rating on the customer review website Trustpilot; the highest rating available.
Protection and security of funds is our top priority. Key Currency is an FCA regulated Authorised Payment Institution (No. 753989), and as such, all money transfers are conducted through safeguarded client accounts.
If you would like to compare our rates to your bank or existing provider, please request a quote below.