Expert: Harry Hayfield - 4/26/2006

Question
what are the implications of a strong versus a weak pound. i don't understand!

Answer
A strong pound against a weak dollar means:

£1 = $2

British person pays £5 for a good
American person pays $10 for a good (but the company making the goods loses money on the currency conversion)

A weak pound against a strong dollar

£1 = 50c

British person pays £5 for a good
American person pays $2.50 for a good (but the company will need to raise US prices to maintain profits)