The clouds of economic gloom may be gathering - but the silver lining for Bermudians is the rising value of the dollar.

Yesterday the pound briefly dropped below $1.50 for the first time since 2002. During the summer, sterling was valued at more than $2.

Effectively, it means that Bermuda residents will be able to get around 25 percent more bang for their buck in the UK than they could just a few months ago.

The dollar has also appreciated in value by more than 20 percent against the euro in the past three months. Yesterday, $1.25 could buy you a euro, meaning that Bermudians' dollars will buy a lot more in the 15-nation euro-zone than they they would have done in the summer.

The story is similar with the Candian dollar. Yesterday, a US dollar was buying around C$1.23. In July the two currencies were trading roughly at parity.

Importers bringing goods to the Island from Europe and Canada will benefit from the dollar's dramatic strengthening.

Crude oil is priced in dollars, so a stronger dollar ofetn goes hand-in-hand with falling energy prices. That would also bring benefits to the Island in terms of lower fuel and electricity bills. Yesterday, crude oil hit a 20-month low of $56.16 a barrel.

Investors have flocked to the US dollar, which is tied to the Bermuda dollar, seeing it as a less risky currency than most others around the world. This has happened in spite of the US Federal Reserve's repeated cutting of interest rates, a trend which usually deters investors in a currency.

The UK pound plunged yesterday after Bank of England Governor Mervyn King signalled policy makers will likely slash interest rates further before the end of the year to revive the flagging UK economy, which is likely to shrink well into next year.