A Tough Performance from the British Currency
Posted by Allison on 5 April 2016, 11:39
If you read the excerpt for this article, you will know the British pound did not perform well last week. In fact, we would be hard-pushed to find a good result for the pound.
An overview of the currency markets for March 21st – March 25th 2016
So how would the week progress for the British pound against the US dollar? Well, the week began with a rate of 1.4487, but this soon dipped to 1.4394 on Monday. This didn’t bode well for the week as a whole, but we have seen poor opening days before and it hasn’t necessarily led to a poor week altogether. Unfortunately, that would not be the case this time. In fact, every single day this week produced a poor result for the British pound. By the time the week came to an end, the pound could only muster up a rate of 1.4130 against the US dollar. Not the best start – but would the bad news spread to other rates as well?
Let’s see whether we would have a similar picture against the euro, too. Here the pound got started on a rate of 1.2844, but once again the early signs were far from encouraging. The pound had dipped to 1.2770 by the end of day one, before dropping further to 1.2691 on Tuesday. Indeed, we would have to wait until Thursday before we got a good result here, which meant the pound finished the week before the Easter weekend (Friday was Good Friday) on 1.2668. This was still down on its opening figure, though.
So would the Hong Kong dollar replicate the performance the US dollar had managed against the pound? The British currency began the shortened week on 11.234 before dipping over the course of the next four days. It was certainly shaping up to be a very poor week for the pound, and indeed, by the time the trading days were finished with before Easter, the pound had fallen to a low for the week of 10.964.
Our fourth stop on this exploration of tough times for the pound was in New Zealand. You can never tell whether the pattern here will be the same as that found in other areas, but we shall soon see. There was actually very little change on day one, as the pound went from 2.125747 to 2.125717. However, after that, things soon took on a more familiar pattern. We dropped back to 2.1101 on Tuesday, before rising to 2.1112 the following day. This was not enough to assure us of a good finish though, and instead, the pound ended the week on 2.1086.
So it was perhaps with an air of inevitability that we ended the week expecting more of the same against the Australian dollar. This would turn out to be a prophetic thought indeed, as we began on 1.9014 and lost ground every single day apart from the last one on Thursday. By that time, we had dropped to 1.8822.
Notable events in the world of currency
A mild loss against the Canadian dollar
We thought things were going to be really bad here, as the starting rate of 1.8787 dipped to 1.8580 midweek. However, the pound did recover slightly to 1.8775 by the end of the week.
But a confirmed loss against the Swiss franc
Here the pound did not do at all well, losing ground on every single day this week. This sent it down from 1.4024 to 1.3776 by Thursday evening.
Another drop against the Icelandic krona
Here too, we found bad news and nothing else. The pound began trading on 180.659 before dropping steadily throughout the week to land on 177.880.
So we can see, the week did not go well for the pound on this occasion. Perhaps we can hope for a much stronger performance next week, although there is always the worry things could get even worse. It remains to be seen what will happen. We will be back to report on the second short Easter week to come.