The British Pound Goes Head To Head With The Euro

Posted by Allison on 14 April 2010, 13:48

Sometimes in this series of articles we look at some more obscure currencies to get an idea of how the British pound is performing on a wider scale.  But this month we are looking at major currencies on the currency converter – and they don’t get much bigger than the Euro.

So how did the pound do against this European currency during March?  Let’s find out.  We are starting from a rate of 1.1201, but almost immediately things were looking poor for the pound.  The following day it had been beaten back to 1.1029.  A closing rate for the first short week of 1.1080 pointed to the fact that the Euro could well be in charge for this particular month.

A month is a long time though, particularly in the currency markets, and anything could yet happen with regard to these two currencies.  By the tenth of the month the rate had changed to 1.0972 though, so it wasn’t looking too healthy for the pound at this stage.  The further away we can stay from parity the better, and yet at the moment we appear to be heading further towards it.

We did at least end that week on a rate of 1.1009, which was better than we could have hoped for.  But the week beginning the 15th ended up seeing the pound lower again on a rate of 1.0982, so anything could and might happen at this point.  We still had a good couple of weeks to go in the month.

But this turned out to be a stronger week with a rate of 1.1026 recorded on the following day.  This was followed up with another improvement to 1.1158 on the 17th, and in the end the British pound finished the week on 1.1179.  It wasn’t exactly a resounding success but it was better than we had perhaps hoped for a short time before.  There was still a lot of work to be done if the pound could be deemed to be in more control though.

The next week was really an up and down affair which saw the pound close out on Friday night on a rate of 1.1106.  We were hoping for more, because this actually saw us make a loss for the whole week.  But there was a lot to get to grips with here and at least the pound was still battling to be recognised and to get a better rate.

And thankfully it did finally get its teeth into things for the last three days of trading left to it.  There was no time to make a grand improvement that would see us finish on a great result, but we did manage to claw things back to 1.1238.  This gave us a nice result for the end of the month and at least recovered something to start off April with.  And indeed we were actually slightly better off than we had been at the start of March, so that at least was worth celebrating.

 

Comment

  1. This report to me showed exactly how two embattled currencies tend to lock horns when they go up against each other. I’m sure if you look at how the Euro has done against other currencies lately you will see that it has been through some tough times. All the trouble Greece is having has contributed to the doubts over the single currency.

    And the pound is having problems of its own, thanks now to the impending General Election which seems to have stalled any progress it might hope to make.

    So in essence then we have two poorly currencies going head to head and trying to get a good result as a consequence. And neither of them are doing very well are they?

    — Allison · Apr 27, 06:56 PM · #

  2. It just goes to show that if you look over a longer period the British pound is capable of doing better than the Euro at times. And while both currencies are having a rough time it’s good to see the pound coming out ever so slightly on top.

    Greece has just been allocated a junk rating (that happened the day before I wrote this) so the Euro has struggled even more since then. I reckon this will only serve to benefit the pound, so let’s keep our fingers crossed this is true. You never know, European holidays might actually become better value again very soon!

    It would be nice if they did, although I’m not sure what effect it would have on Greece.

    — JamieK · Apr 28, 11:25 AM · #

  3. I can understand wanting to find out more about how the pound is doing against various other smaller currencies. But I really agree with the premise behind this article – especially as the Euro is really going through tough times at the moment.

    As far as I am concerned we can probably learn more about the pound through its struggles against the Euro than we can against any other currency. I personally don’t want to see the pound disappear to the Euro, especially if it isn’t going to last much longer anyway. That would just be insane. And I think if we focus on the pound and its strength against the Euro we can make our case for keeping our own currency. Does anyone agree?

    — Allison · Jun 29, 06:47 PM · #

  4. I believe personally that lots of businesses in Europe will be watching closely to see how the British pound fares when it comes to its exchange rate with the Euro. There has been much speculation recently over the possible or probable future of the Euro, and whether it will last for several years more. Whatever the outcome might be, it is still important for UK businesses who are importing from the Eurozone to see strong results from the British pound. The weaker it gets against the Euro, the worse the situation is for importers.

    For exporters it is a different situation entirely however, and this just illustrates how the balance is always achieved. As one country or area benefits, so another does not.

    — TKL · Jul 28, 09:07 PM · #