More Bad News For The British Pound
Posted by Allison on 15 May 2009, 13:58
When a particular currency does badly enough that it registers the worst result it has seen in well over a decade, you know things must be pretty bad. And of course we are in a recession.
But unfortunately that is exactly what has happened to the British pound as it has gone up against the Australian dollar of late. Now anyone who regularly keeps an eye on these two currencies will know that things can go up and down quite remarkably over a short space of time. This is true even if that happens during the short space of a week.
But there are news stories that have hit the internet in recent days that have pointed to the fact that the British pound has hit a new low. The Australian website The Age has no doubt enjoyed reporting the fact that their currency has got the better of us. You can read their report here.
So let us see what has actually happened. To give you some context of what is going on, the first day of January this year saw an exchange rate of 2.1285 Aussie dollars to the pound. Since then your currency calculator has been returning some very different figures though.
The 23rd February saw the largest climb to date, as the pound claimed 2.2546 Aussie dollars. But how very different things are now.
On the 20th March the rate dipped below 2.10 and stopped at 2.0952 for the day. It managed to get its head above it again for a single day a few days later, but then it dropped back to 2.0892 on the 25th March.
So what did April have to bring us? You can probably guess by now that there was nothing very impressive to report here. And in fact things did only get worse. The first day of April saw the pound bagging 2.0726 Aussie dollars. The very next day that had dropped to 2.0590 but it perked up again just twenty four hours later. It was clear that the pound was trying its best to keep its head above water here, but it was beginning to fight a losing battle. In fact, it could be said that the battle had been lost some time before.
The Easter break got underway with the pound bagging a total of 2.0560 Australian dollars. But no sooner were we back than the rate dropped to 2.0438. It did at least perk up to 2.0804 the next day though.
But if we thought that was a good sign we would be very much mistaken. Things kept on dropping for the rest of April, and although the odd day might see a jump up with a few extra cents added on for good measure, it didn’t last.
On the 6th May we claimed 2.0220 Australian dollars to the pound – and on the next day we plumbed the depths that we hadn’t done for over a decade. By the close of play on the 7th, we stood at just 1.9883. And at the time of writing the British pound has failed to get back above the two dollar rate of exchange.
Will this carry on, or is this the way things are going to be for a while? We are reminded of the US dollar and the way we dropped like a stone against that currency. Perhaps this is a case of history repeating itself.