What is the pound to ransack? First, let’s define what the pound to rand is: the value that one may receive in exchange for money in the United Kingdom, specifically the pound sterling. The British pound is currently the official currency of the United Kingdom. It is also the fifth most common currency in the world. This form of currency is often referred to as “the pound.”
The south African Rand is issued by a Central Bank of South Africa. The rand exchange rate is considered risky for the investor, although there is no shortage of it in the world market. The main reason for this is because the banking crisis in South Africa has severely devalued the South African Rand (SBD) to the tune of over one-hundred percent over the last year. Investors in the United Kingdom, therefore, have been forced to shift their money from the GBP (derivative of the SBD) to the USD (derivative of the EURO). When this happens, it means that investors are receiving significantly less in return for their investment than they did before. While there is still some risk involved with trading in the United Kingdom’s currency, it is much less than what it was six months ago.
How is this so? Well, the main difference between the two currencies is that the pound hasn’t yet experienced a negative interest rate, which has been the case for the past seven years, and while the British government is contemplating a possible bailout for the pound, its stance toward other forms of currency is far less aggressive than that of the previous government. Thus, for the British investor, investing in the United Kingdom without hedging against a potential loss in the pound would seem like a sound strategy. There is also the fact that the United Kingdom is one of the only countries in the world to be not having a major currency default (as opposed to the current situation in the United States), which is also a factor in its favor.
What are the consequences for an investor who is now trading in the pound rather than the euro, or the United States dollar? First, there is no longer a great deal of volatility in the market. In fact, if you are an American investor and you suddenly decide that you would like to sell your dollars in the UK pound rather than the euro, you would probably find that your price is fairly consistent across the board. On the other hand, the price of the British pound has been fairly consistent in the past, and if something unexpected occurs, or there is political unrest in London, there is little that the rest of the world could do to change the value of the pound.
Second, even if a country were to issue an emergency currency supply just to counterbalance the British pound, it would hardly make any difference. This is because the British pound Sterling official currency is backed by the full faith and credit of the United Kingdom, which is why the Bank of England retains the right to print money as and when necessary. A common belief is that the Bank of England prints more money than it needs to do so. If it were true that it was printing too much money, then the economic balance in the UK would be threatened.
Third, the political stability of the UK and the monetary policies of other countries do not always coincide. In the past, countries with stronger economies and lower interest rates have often tried to combat deflation by printing more money. The British pound has not suffered as a result of this practice and in fact has increased in value since the start of the global recession. It is this fact that has made many US citizens convert their pound sterling into other currencies in order to fight inflation.
There are several popularly used alternative currencies in the world today. These currencies include: the US dollar, Canadian dollar, Swiss franc, New Zealand dollar, Australian dollar, Singapore dollar, Japanese yen, Swiss franc, Euro, Australian dollar and the Swiss franc. Most of these currencies are highly volatile and can fluctuate wildly in relation to each other. As a result, a relatively small change in one of these currencies can cause an enormous effect on the value of all the others.
One of the most stable and widely traded international currencies is the Swiss franc. This is mainly due to its favorable economic structure where trading is free and involves direct taxation. As well as this, the Swiss government does not interfere in the foreign exchange market. Due to its favorable exchange rate, the Swiss exchange rate is used as a barometer by financial institutions and companies worldwide to determine their foreign exposure and investment portfolio. As a result, a large number of multinational companies and organizations invest in Switzerland as it offers favorable returns. If you are interested in investing in Swiss francs, then you should consider investing in Swiss Sterling.