Can the British Pound Take Advantage of a Euro on the Ropes?
Posted by Allison on 14 October 2011, 14:13
Unless you have been somewhere out of reach of the outside world in recent months, you cannot fail to have noticed that the Euro has never been in more trouble than it is at the moment. At the end of August the British pound was worth 1.1291 against the European single currency. But a lot happened during September. Could the pound take advantage of the situation the Euro was in?
Things started very encouragingly with a rise to 1.1348 on day one. The first week ended higher still on 1.1377 and there was no sign of any weakness at all from the British pound at this early stage. Indeed the currency rose to 1.1427 by the end of day one of the first full week, on the 5th September. We could not have hoped for a more promising start than this.
Sometimes it seems as if the pound enjoys a few stronger days against the Euro, only to lose ground again later on. But there was no sign of this at present, as the pound finished the week on the 9th on 1.1548.
The question now was whether the pound could keep up this performance for the remainder of the month. As troubled as the Euro was, it seemed unlikely that the pound could continue to increase the value to this degree for the rest of the month. Perhaps then we should not be surprised to see that things started to go back in the opposite direction. The pound reached its high point for the month - 1.1625 – on the 12th and then dropped back to 1.1471 to close out that week.
There were still around ten days to go until the month was over, so this meant that a lot could happen. Most of the time however, the exchange rate on the currency converter stayed around the 1.14 mark. That is, until the final day of the month, when the pound reach 1.1538. So it was an interesting month in which the pound did very well indeed.