A Hard Week Once Again for the British Pound
Posted by Allison on 24 October 2016, 16:38
It’s time once again to see whether the British pound could survive another week of onslaught from a barrage of major currencies. Could we expect to see any good news?
An overview of the currency markets for October 17th – October 21st 2016
Here we go with another week in the life of the British pound. It started off by dropping in value against the US dollar once more, this time from the opening rate of 1.2236 to 1.2150. We then had a couple of better days which took the pound up to 1.2289 by Wednesday. However, two days in the world of currency can see many changes, and we still had two more to go. Here, we ended up falling over the course of the final two days of the week. This meant the pound finished on 1.2187, which was lower than we had seen at the start of the week.
Would something of this sort happen against the euro as well? The British pound began trading on 1.1122 here, before slipping back to 1.1051 on day one. However, we then had two stronger days once again, which took the pound back to a stronger position of 1.1193 on Wednesday night. Despite a slight drop on Thursday, the pound managed to finish up on 1.1195 on Friday, which was actually better than we’d hoped and better than we’d started with, too.
Onto Hong Kong now, to see where the pound would end up against their version of the dollar. We began trading on 9.4942 and again saw that same pattern pop up over the first three days – one drop followed by two good days. This meant that by Wednesday, we were on 9.5340. However, there was disappointment to come as there was a drop over the course of two days for us now. This meant we had a closing rate of 9.4555 on Friday – a drop over the entire week.
We expected more of the same against the New Zealand dollar as well. Although the pattern was slightly different here, the pound certainly didn’t have a good week all in all. From a beginning rate of 1.7248, we dropped to a week-long low of just 1.6953 by Thursday night, despite the fact we’d had a good day in the middle of all that. We did manage to recoup some of our losses by Friday night, but not enough to warrant a closing rate that was any more than 1.7006.
Finally, we have to see whether the pound was able to minimise the damage it experienced against the Australian dollar. Our opening rate here was 1.6039 and after dropping to 1.5954 on day one, we had a couple of better days. This meant the midweek rate was 1.6004. However, that was still lower than the opener had been, and by the time another two days of trading had gone by, we had dropped further to 1.5974.
Notable events in the world of currency
A slight increase against the Canadian dollar
Perhaps surprisingly, the pound did okay here. After starting on 1.6110, it rose to 1.6144 at best, before slipping back to 1.6122 at the end of the week.
Another slight rise against the Swiss franc
You may not have expected this. but in the end, the pound rose slightly from 1.2111 to 1.2119 this week.
More of the same against the Icelandic krona
Here too, we had a surprising, if slight, rise. The pound started the week on 139.900 before ending it on 139.925.
Given the results that went before, those last three outcomes did come as a surprise. However, they were very slight in nature, so there was really little difference in where the pound stood against these currencies compared to the start of the week.
Perhaps most importantly, we have seen how the pound has trodden water in some areas this week, while struggling more in others. Will this show us the way forwards, or is there more bad news to come?