Would The Year End Well For The British Pound Against The Euro?
Posted by Allison on 14 January 2011, 04:23
Watching the tussle between the pound and the Euro has been very interesting of late. There have been many problems in the Eurozone and this has allowed the pound to make some headway in gaining a better exchange rate against the European single currency.
But with 2010 fast coming to an end, would it be able to successfully garner the kind of exchange rate on the currency converter that it really wanted? Let’s go back and see what happened as December played out.
The rate we were left with at the end of November was 1.1938, so any improvement on that would be a good thing. Unfortunately by the end of the first week we were down to 1.1792, so it was clear we’d be giving ourselves a tough job to try and do anything worthwhile over the whole month.
But what a difference a single week can make, especially on the currency markets. If we were feeling a little dejected after those first few days of trading, we were feeling a lot more positive by the end of the following week. By this time we had pulled our socks up and landed up with a better rate of 1.1945 instead.
So where would we go from here? Well unfortunately the answer was down, as this was turning out to be a strange month of seesawing from one extreme to the other. It seems hard to believe but after another week of trading briskly, the British pound could only claim 1.1739 Euros. This was even lower than the poor week we’d already had, so it was really making us question what would happen throughout the rest of the month.
There was a marginal improvement to 1.1817 as the following week got underway but then we slipped back once again. This was getting to be a disappointing time and we held out little hope of anything miraculous happening by the end of the month. Perhaps it was simply hoping for too much to get a good result now.
Indeed we seemed to be stuck in the 1.17 region for the rest of the month. We were not going to be strong enough or lucky enough to get back into the 1.18 region at all, let alone repeat the fantastic 1.19 result we’d had before then.
We struggled on regardless and tussled around with the Euro until we eventually arrived at New Year’s Eve. This was the day that the pound accepted defeat and claimed a final rate for 2010 of 1.1617. This was, needless to say, a resounding disappointment given the results we had achieved (albeit only briefly) earlier on in the month. Could we hope to get better results than that or would we end up having another bad month in January as well? It remains to be seen at the time of writing what will happen.
So it just goes to show that it may not necessarily be a Happy New Year for the pound.