Exchange Rates – A Metaphor

Exchange rates are a country’s share price.

Shares and share prices are fairly simple to comprehend. The more successful a company, the greater the profits they make, mean their share price will increase or remain high. Apple, Google, BP.

When the UK pound plummets, it hits the news. Normally because of a financial or economic disaster. The Brexit referendum caused the pound to slide; each time our MPs extend Brexit, the pound remains low. A new Government with great ideas and positivity makes the pound rise.

The exchange rate is determined by markets but more importantly, the way the world sees us. It’s their view of the UK. Our prospects are dim, the pound falls. Our future looks bright, the pound rises.

Just the same way as shares portray the company that issues them. Exchange rates are a country’s share price.

I wonder what’ll happen when we finally leave the EU?

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