Pound sterling

The United Kingdom's pound sterling was the primary reserve currency of much of the world in the 18th and 19th centuries. The dire economic cost of fighting the First and Second World Wars, the increasing dominance of the USA in world economics (and, importantly, the establishment of the American Federal Reserve Bank in 1913) as well as economic weakness in the UK at various intervals during the second half of the 20th century resulted in Sterling losing its status as the world's most reserved currency.As from mid 2006 it is the third most widely held reserve currency, having seen a resurgence in popularity in recent years.Analysts say this resurgence is caused by carry-trade investors considering the pound as a stable high-yield proxy to the Euro