The fact that Currency can be useful in making money has been known for a very long time. However historically it has been different and for many years even as late as the 60’s and 70’s in schoolbooks you could read as an example that 1.00 US$ = NOK 7.15 or that 1.00 GB£ = NOK 20.00. The same was the case most all over the world. But slowly people started to realize that the value reflected in a country’s currency not was something static. It will vary over time and show the value at any time reflected in the country’s ability to create growth and value, GDP.
By utilizing the difference in value over time it is possible to make money or reduce debts. By foreseeing how the currency between one or more countries will develop you can take a position in one currency and then change it back when you have seen a profit. For how long you shall wait and at what percentage you should take profit it will be up to you to decide.
Below we have listed the development between NOK and GB£ over the last 10 years and over the last 12 months. It is easy to see how much money you could have made by playing this market, both on a long and short term. Will this continue? Well it depends of course on several factors, but in many ways boils down to the fact weather one believes that the GB£ will regain its strength or not, or will it continue loosing ground against the NOK? You can naturally make the same assumptions towards any other currency and play those markets.
Historically GB£ to NOK = 20.00
October 2010 – October 2011
Year 1998 – 2010
Source; Norges bank – Bank of Norway
Exchange rate, Pound Sterling (GBP)
NOK per 1 GBP
Spot rates against Norwegian kroner, annual average of daily rates.
January 1999 -: Annual average of daily rates at 2.15 pm.
May 1996 – December 1998: Annual average of daily rates at 9.30 am.
September 1991 – April 1996: Annual average of daily rates at 11.30 am.
January 1981 – August 1991: Annual average of daily rates on Oslo Stock Exchange at 11.30 am.
Before 1981: Annual rates.