A Punishing Week for One Particular Currency
Posted by Allison on 5 March 2013, 16:35
Welcome back to another currency report, where we see how February came to an end on the currency markets and how March began. Here we go up to 1st March, so let’s see how things progressed through these few days.
An overview of the currency markets for February 25th – March 1st 2013
So as the week started we saw the British pound claiming a rate of 1.5296 against the US dollar. This immediately dipped to 1.5137 on day one, so it didn’t bode well at the start of the week. However day two was better, as the pound increased slightly to 1.5147. By the time another twenty four hours had gone by, the pound was improving still more to 1.5157. However we didn’t manage to hang onto those good results for the rest of the week. Instead the pound dipped back to finish on a disappointing 1.5034.
The question now was whether the pound would achieve much the same against the Euro. The opening rate here was 1.1600 and shockingly this plummeted to 1.1377 at the end of day one. This was an incredibly bad start to the week. Fortunately the pound perked up on Tuesday and managed to close out that day on 1.1583. From there on it was an up and down affair, although not as bad as those first couple of days had been. We eventually saw the pound finish on 1.1564.
Our next stop is Hong Kong, where the pound opened the week on 11.864 against the Hong Kong dollar. This dropped to 11.740 on day one, before improving slightly on Tuesday and upping its rate to 11.753. The pound continued to perform well and ended up achieving a rate of 11.799 on Thursday night. Unfortunately Friday didn’t end well and we were back down to 11.660 to finish the week.
Let’s focus on how the pound performed against the New Zealand dollar now. Here we started on 1.8254 and lost ground immediately to end day one on 1.8013. Fortunately we picked things up again fairly quickly and managed to improve our closing rate on day two to 1.8307. However while we performed slightly better after this we still didn’t manage to finish on a better note than we had started. Instead we slipped back to 1.8224.
Finally we have our fifth stop for the week to see whether the pound did any better against the Australian dollar. The opening rate was 1.4805 and it didn’t look good as the pound fell back to 1.4674 on day one. This was beginning to look rather familiar and indeed the pound recovered to 1.4783 the following day before improving a little further to 1.4862 the day after. However the pound then started dropping in value and closed out the week on 1.4734.
Notable events in the world of currency
A small drop against the Canadian dollar
After the picture we have seen thus far, it perhaps does not come as a surprise to learn the pound has fallen against the Canadian dollar too, from 1.5611 to 1.5539.
Another fall against the Swiss franc
Here the pound fell from a starting rate of 1.4235 to 1.4160 at the end of the week.
Three out of three with a poor performance against the Chinese yuan
It clearly wasn’t a good week for the pound as it dropped from 9.545 to 9.356 against the yuan.
We can see how disappointing a week it was for the British pound. There is no doubt the pound is struggling at the moment, especially since its AAA rating has been reduced for the first time in a long time. This has dented its performance, although perhaps we could have had it a lot worse than this. Only time will tell whether the pound will continue to struggle in the weeks to come, or whether this was a blip in its performance. We think it could be the former, although we shall have to wait and see.