The impact of Queen Elizabeth's death on the US Dollar

The GBP British pound is at the forefront of some interesting forex market fluctuations even after Queen Elizabeth II’s death.

Xe Consumer

January 18, 2023 5 min read

Pound and Dollar - GBP to USD

Following Queen Elizabeth II’s death in early September 2022, the GBP fell slightly against the euro and the U.S. dollar. However, many pundits were quick to point out that the Queen, have only a limited influence on political and economic goings-on throughout the United Kingdom. Though she reigned as England’s longest monarch since becoming queen in 1952, there were numerous other factors, including British political turmoil, that likely contributed more to the fluctuation of the GBP British Pound forecast.

The United States has struggled similarly with rising concerns about inflation and a looming global recession. The impact of Queen Elizabeth's death on the US Dollar was a defining moment for many US businesses, but in 2022 a contentious election and an uncertain economy relegated foreign policy to the backburner.

When compared to the strength and resilience of the economies of other major countries, however, the United States has been able to maintain a strong dollar for a couple of reasons. Firstly, and perhaps most importantly, the Federal Reserve increased the federal funds rate an astonishing seven times in 2022, with more hikes expected on the horizon in 2023.

What Happens Now?

While Queen Elizabeth II may not have had as much influence as the monarchy once did in Great Britain, there’s no doubt that she was loved and revered by countless people living within the United Kingdom and around the globe. Immediately following her death, the United Kingdom began a national 10-day mourning period to allow citizens and well-wishers to pay their respects and grieve for the monarch. Eventually, banknotes and coins adorned with the Queen’s image will be phased out of use for newer banknotes and coins.

The British Royal Mint is responsible for minting coins and medals for the United Kingdom and numerous other countries as well. As for the physical currencies depicting Queen Elizabeth II’s person, those coins and banknotes will ultimately be replaced by images of King Charles III. And according to the Bank of England’s official website, they expect to begin issuing new banknotes featuring King Charles III’s portrait by approximately mid-2024.

But as for the fate of the value of the GBP – that remains to be seen. As fears around global inflation rates continue to fester, economic experts’ outlooks range from fairly grim to modestly and cautiously optimistic. Inflation is perhaps the primary factor impacting the value of many major world currencies and because the U.S. dollar is still largely considered by many to be one of the safest and most resilient assets in the world, non-USD currencies were hit hardest in 2022.

However, there are a few positive indications from within the United States that might be signaling an end of rising inflation. If the U.S. and the Federal Reserve are capable of mitigating inflation with rate hikes and other initiatives, the GBP may have a better chance of regaining some of its strength against the USD. If pound to dollar forecasts are wrong, or if unexpected global events continue to exacerbate inflation, the GBP and many other global currencies could be in for a lengthy struggle.

Future Implications

So if the Queen’s death isn’t having the greatest impact on the strength of the GBP and the GBP to USD forecast, what is? The answer to this question is complex and various, there are numerous contributing factors that determine a currency’s strength.

In today’s global economy, one of the greatest driving forces is inflation and recessions caused by inflation – even the fear of a recession can exacerbate economic issues because it slows down economic growth as nervous consumers and businesses strive to protect assets and their longevity.

According to Macrotrends, the current exchange rate between the Pound to US Dollar – 1 GBP to USD – is approximately 1:1.21. Historically, the rate has been closer to 1:1.6 or even 1:2, but since the previous significant global recession in 2008, the GBP has struggled to stay above 1.5. And many financial experts suggest that if the GBP is to experience any recovery at all in 2023 that it will be modest, perhaps increasing by only .01 or .02 by the end of the calendar year.

Businesses and individuals may become increasingly reliant on the USD, and other forms as currencies like the GBP and EUR continue to struggle. Many international travelers rely on Xe to help them insure the safety of their hard earned money amid the political, Covid-19 pandemic, and economic turmoil that is the current state of modern-day United Kingdom.


While many viewed the Queen’s death as one of the most significant tragedies in modern times, she will certainly go down in history for her strength, perseverance and resolve to raise the profile of women around the world. And while it’s possible that her passing may have weakened the GBP slightly against the USD, there were numerous other contributing causes to the weakening GBP. Attributing the GBP’s current slump solely to the death of the Queen would not be entirely accurate.

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The content within this blog post is not intended for use as financial advice. This content is for informational purposes only.

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