A Poor Show for the Pound Against a Raft of Other Currencies
Posted by Allison on 1 June 2013, 17:15
Welcome to our next currency report, which has some dramatic news to share. With no further ado, let’s see what happened.
An overview of the currency markets for May 20th – May 24th 2013
As the week began, the British pound stood at 1.5234 against the US dollar. We were hoping for a good start but it turned out to be anything but – the pound slid to close the first day of the week on 1.5199. After that it seemed as if we were on a downhill slope, as the pound went into freefall and finished up on 1.5071 on Thursday night. It regained a little to finish on 1.5098 on Friday, but it was still a bad week here.
Next up let’s see whether there would be a similar pattern against the Euro. Unfortunately the answer looked to be yes, as the pound began the week on 1.1837 and slid back to 1.1683 by Wednesday evening. It improved a little on Thursday to close on 1.1693 before dropping back once more to finish the week on 1.1669.
Did this mean we were in for a bad time against the Hong Kong dollar as well? Let’s find out. We began with a rate of 11.827 on Monday and once again the predictable fall was soon beginning. The steady fall continued right through until Thursday, when the pound reached a low of 11.699. It did manage to buck up a little to close on 11.721 on Friday, but this was not enough to repair the damage done thus far.
Things can turn out differently against the New Zealand dollar when things are bad everywhere else, but it was not the case this week. The British pound began on a rate of 1.8842 but immediately fell to 1.8637 by the end of day one. The low point here was on Tuesday, as the pound bumped along the bottom with a rate of 1.8585. Even though it perked up a little after this, it still did not achieve anything better than a closing rate of 1.8627 on Friday night.
Finally let’s see where the pound would stand against the Australian dollar. The opening rate was 1.5644 and once again the first few days were anything but good. The low point was on Tuesday when the pound sank to 1.5483 and it improved from then on, finishing on a slightly healthier 1.5576 by the time the week was over. So while the final day of the week saw a better performance all round by the British pound, it was clearly not enough to enable the currency to wipe out all the bad results it had experienced before that moment.
Notable events in the world of currency
A small drop against the Canadian dollar
Here too there was a drop in the exchange rate, as the pound fell from 1.5649 to 1.5600 over the week.
A bigger drop against the Swiss franc
Here there was more to be concerned about, as the pound fell from 1.4736 to 1.4546 as the week went on.
A further drop against the Chinese yuan
Here the pound started on 9.3566 and dropped to 9.2585 by the time the week was over.
Clearly this was far from being a good week for the British pound. In fact there were really no good results to celebrate at all, at least not against the major currencies. It does make you consider what could happen in the days and weeks ahead too. Was this a minor blip that meant the pound had dropped but would soon bounce back? We may find out next week, as we see whether the pound can get better results or whether we will be in for more of the same.
We can seize on Friday’s slightly more encouraging results as something to ponder over as the week goes on. Hopefully these will lead the pound into a more promising week where it can recoup some of the losses it has experienced this time around.