The lowdown on the US dollar
As the leading currency on the planet, the US dollar is the world'southward well-nigh used currency in international transactions and the globe's almost dominant reserve currency. It'southward used in several countries across the world every bit an official currency, as well as a de facto currency in plenty more than places afterwards that.
The iconic dollar bills are recognised the earth over and you'll hear tons of nicknames for the famous United states currency – from smackers to doubloons, Benjamins to clams.
Ever wondered where the dollar gets its proper name? Way back in the 16th century, Count Hieronymus Schlick of Bohemia began minting silver coins known every bit joachimstalers, named after Joachimstal, the valley where the silver was mined (in the modern twenty-four hours Czech Republic). Joachimstaler was later shortened to taler and the discussion found its style into Danish, Swedish, Norwegian and Dutch as daler, Hungarian as tallér, Italian as tallero, and English as, you lot guessed it, dollar.
Soon, all coins of a like size and weight were known as dalers, such equally the near popular coin of the fourth dimension for international trade: a Dutch coin with a lion on it. This Dutch coin became known as the leeuwendaler, which translates every bit 'lion dollar'. The leeuwendaler was very popular across the Dutch East Indies and in the Dutch colony of New Netherlands (now New York), soon spreading to the 13 Colonies during the 17th and 18th centuries, where the name caught on in English language as the 'king of beasts dollar'. In fact, the modern mean solar day pronunciation of the word 'dollar' is actually still very shut to the 17th century Dutch pronunciation of 'daler'!
Of course, when Spanish pesos arrived in the US with the aforementioned shape and weight equally the lion dollar, they soon garnered the nickname of 'Spanish dollars'. These Spanish dollars became the currency of the Castilian New World past the mid-18th century and when the fourth dimension came for the first official currency of the USA on September 8 1786, there was simply one reasonable choice: the The states dollar was born.
A expect dorsum at British pound to US dollar rates
Leading upward to the early on 20th century, the concept of an official 'exchange charge per unit' hadn't yet been invented. If you wanted to convert dollars to pounds back then, you lot'd need to purchase actual gold in the United states and then ship information technology to the UK where y'all could sell it for its worth in pounds. Imagine going through that process every time you wanted to go on holiday! What's more, since in that location was no official substitution rate, the corporeality of pounds y'all'd get for your dollars would depend on the price of aureate in the two countries – this is where the basic principle of the Gilded Standard comes from.
More on the Gold Standard
From the 18th century, the pound and dollar fluctuated betwixt using a fixed Gilt Standard and using a free market place, with £1 buying around $iv.70. Past 1937, every state in the world had abandoned the thought of the Gold Standard and the $/£ charge per unit hovered around $five dollars to the pound. With the outbreak of WWII, the dollar dropped significantly against the pound and the British government decided to officially peg the dollar against the pound at a rate of $iv.03.
Mail-war pounds and dollars
Following the devaluation of the pound over the side by side few years, the exchange charge per unit fell to a fixed rate of $two.twoscore by 1967. In 1971, the The states put a cease to freely converting between currency and aureate, ending the last vestiges of the Golden Standard and establishing the freely-traded currency we all know and then well today.
Over the side by side few years, the highs and lows of the pound to dollar were pretty substantial, with a $two.44 high at the end of 1980 contrasting starkly with a charge per unit of simply $one.05 to the pound in February 1985.
Disaster struck in 1992, when the Britain was forced to remove the pound from the ERM (Exchange Charge per unit Mechanism) in a motion known as Black Wed, later on it was unable to keep higher up its agreed lower limit. The pound cruel dramatically to but $1.40 within a few months. After peaking at $2.01 in January 2008, the pound dropped further to $1.36 in 2009 merely has hovered around $1.60 for the concluding v years. That's around £0.67 to $1.
Planning a trip to America shortly? Take a look at our essential guide to the ultimate American trip.
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