Tag: fixed exchange

The post below considered the pound and now we look closer at some other international currencies and their movements. The pound has fallen, but what about the euro and the US dollar? What about the Japanese yen and the Australian and New Zealand dollars? How are the different currencies inter-related and how do they affect the various macroeconomic objectives? The following articles look at some of the recent movements in currencies. Consider these in relation to economic theory about exchange rates and government policy.

Pound plumbs five-month euro low BBC News (21/9/09)
Australian, N.Z. Dollars fall for third day as commodities drop Bloomberg (21/9/09)
Dollar ready to rise as greenback fades Brisbane Times (21/9/09)
Pound slips on Bank of England warning Times Online (21/9/09)
Canada’s dollar declines for second day on drop in commodities Bloomberg (21/9/09)
Yen firms versus European majors, hitting a 2-day high against pound Forex news (18/9/09)

Data on exchange rates can be found at:
Statistical Interactive Database – interest & exchange rates data Bank of England


  1. What have been the general trends in some of the main international currencies?
  2. The pound has fallen against the euro and the dollar, but what does this mean for the UK economy? And what about the USA and the rest of Europe?
  3. In the current climate, consider whether a fixed or floating exchange rate would be better for the economy.
  4. How do changes in exchange rates affect the government’s macroeconomic objectives?