What would have to happen in the USA economy for the US Dollar to gain in value compared to the British Pound?

This might seem like a simple question to many of you economics students, but I never took an economics course; therefore, I am a novice about this subject. The dollar always seemed to be worth about $1.50 to $1.75 a British Pound for years, but within the last year or so it sank to where High Street banks are only valuing it to about $2.05 to a Pound. Why is this, and how did it happen? What would the Americans need to do if they wanted their dollar to be more at par with the British Pound? Or, what would have to happen in the UK for the British Pound to sink lower in value to be nearer to the USA Dollar level? Thanks! As I said, I am not an economist, so please have patience with my simplistic questions.

Asked By: Rita K - 6/7/2007
Best Answer - Chosen by Asker
The US has to reduce the federal deficit by either cutting down on government spending or increase taxes. That's not exactly a simple question so give yourself more credit... More
Answered By: Dulcie - 6/7/2007
Additional Answers (4)
Lower taxes for corporations! Eliminate social programs!
Answered By: GLL - 6/7/2007
If one could explain exchange rates in the past then one could probably forecast them and make a load of money. But you cant forecast rates with any certainty which proves that its unlikely you could explain past movements either... More
Answered By: inthetrade - 6/7/2007
Think of currency like any other product (supply/demand). Its value is whatever people are willing to pay for it... More
Answered By: flawless51 - 6/7/2007
Q1. What must happen to raise the value of the dollar against the pound... More
Answered By: halifaxed - 6/8/2007
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