A Better Outlook for the British Pound
Posted by Allison on 19 March 2013, 16:53
Welcome back to another currency report. Let’s dive straight in and see how the pound would do this week.
An overview of the currency markets for March 11th – March 15th 2013
We have had a couple of stressful weeks with regard to the British pound and its standing against a range of other currencies. Would it do better this week? The opening rate against the US dollar was 1.5028 but this immediately dropped on day one to 1.4878. Would this be the worst of the week or would there be more to come? Fortunately the former would turn out to be true, and after that the pound started to rise and eventually ended in a better state than it had begun, with a rate of 1.5145.
Moving on to the Euro now, let’s hope we find a similar picture here. The opening rate was 1.1481 and this also dropped, although it took two days to reach its lowest point of the week, which was 1.1411. After that there was only one way to go and that was up, which meant the final exchange rate for the week was indeed healthier, as the pound reached a new high of 1.1574.
Let’s move on to see whether we would get a similar picture against the Hong Kong dollar. Here the opening rate was 11.656 and this did also drop on the first day, plunging to 11.541 in the process. A couple of days later it looked healthier, achieving a rate of 11.603 before dropping again to 11.594 on Thursday night. Did this mean the pound wouldn’t end on a good note like it had elsewhere? In fact it managed to do well, achieving a closing rate of 11.750 as a result.
Our next stop is with the New Zealand dollar, where the pound had left off with a rate of 1.8127 last week. Here too we experienced a drop over a couple of days that left us on 1.8038 before things started to move in a more positive direction. Fortunately the pound was able to finish in style here as well, as it moved up to 1.8388 at the end of the week.
The question now was whether we could end the week in style with a better rate against the Australian dollar as well. Here the opening rate was 1.8127 and once again we experienced the same pattern, at least for the first couple of days. By Tuesday evening we were down to 1.8038, so would we now experience a rise in the last few days? The week was becoming predictable because that is exactly what happened; we managed to end the week on a wonderful 1.8388.
Notable events in the world of currency
A marginal loss against the Canadian dollar
Unfortunately the pound could not achieve a great rate everywhere. Instead it had a slight loss which took it from 1.5464 to 1.5453.
A better outcome against the Swiss franc
It was back to better news here though, as the pound was able to move up from 1.4184 to 1.4245 by the week’s end.
Another small increase against the Icelandic krona
Here the pound began the week on 189.036 and ended it on 189.144, so a small improvement was had.
As you can see it was a far better week than we have seen in recent times. At one point it felt as if the pound was struggling to achieve anything but losses. So it became something of a relief this week to find it was achieving healthy increases against all manner of different major currencies.
The question now is whether the pound can sustain this improvement or whether it is a case of achieving it for a week and then dropping back again. If it can do the former we shall have something more to celebrate next week. However if this is a blip in the proceedings we can expect to find some more challenging times coming back to haunt us again next week. We shall be here watching closely to see which path the British pound decides to head down. With the uncertainty raising its head over Europe once again, it seems more likely the pound will do well here at the very least. We’ll report back next week to see if we are right.