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Exchange rates last updated Friday, 12 October 2018 11:13:57 AM EDT. The online exchange rates provided by this Currency Converter are intended as a guide only and should not be used for transactional purposes. All rates are subject to change from time to time without notice. Exchange rates used in-store may differ from those offered online. The Travelex online sell rate will be used for conversions from US Dollars to a foreign currency.
The latest on USD to GBP exchange rates
The lowdown on British pounds
The oldest currency in the world that’s still in use today, the British pound dates all the way back to 760 when the Anglo-Saxons traded silver pennies known as sterling. With 240 of these pennies to call your own you had one pound, certainly an impressive fortune in the 8th century. Its name comes from the Latin Libra Pondo meaning ‘pound weight’, because its value was the price of a pound weight of silver. Simple!
In 1487 the shilling was born, with the pound coin following along just two years later. Gold coins were introduced in 1560 and copper pennies in 1672. In 1694, the world’s first central bank, the Bank of England was formed and notes were introduced as a way of saying ‘I owe you’, promising to pay the bearer the full amount in gold deposits.
By 1971, the UK did away with the confusing mixture of pounds, shillings, pence and guineas, instead bringing in the simple decimal system that’s used today.
You might hear someone referring to a British pound as sterling, a quid, squid or a nicker. Whatever you call it, the British currency is one that’s steeped in history and is the fourth most traded in the world.
A look back at US dollar to UK pound rates
Leading up to the early 20th century, the concept of an official ‘exchange rate’ hadn’t yet been invented. If you wanted to convert dollars to pounds back then, you’d need to buy actual gold in the US and then transport it to the UK where you could sell it for its worth in pounds. Imagine going through that process every time you wanted to go on vacation! What’s more, since there was no official exchange rate, the amount of pounds you’d get for your dollars would depend on the price of gold in the two countries – this is where the basic principle of the Gold Standard comes from.
More on the Gold Standard
From the 18th century, the pound and dollar fluctuated between using a fixed Gold Standard and using a free market, with £1 buying around $4.70. By 1937, every country in the world had abandoned the idea of the Gold Standard and the $/£ rate hovered around $5 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 $4.03.
The post-war pound
Following the devaluation of the pound over the next few years, the exchange rate fell to a fixed rate of $2.40 by 1967. In 1971, the US put a stop to freely converting between currency and gold, ending the last vestiges of the Gold Standard and establishing the freely-traded currency we all know so well today.
Over the next few years, the highs and lows of the pound to dollar were pretty substantial, with a $2.44 high at the end of 1980 contrasting starkly with a rate of just $1.05 to the pound in February 1985.
Disaster struck in 1992, when the UK was forced to remove the pound from the ERM (Exchange Rate Mechanism) in a move known as Black Wednesday, after it was unable to keep above its agreed lower limit. The pound fell dramatically to just $1.40 within a few months. After peaking at $2.01 in January 2008, the pound dropped further to $1.36 in 2009 but has hovered around $1.60 for the last five years. That’s around £0.67 to $1.