A Tough Week Ahead for the British Pound
Posted by Allison on 18 August 2014, 17:26
We are up for a difficult set of results this week, so let’s dive straight in and see just how bad things got for the pound.
An overview of the currency markets for August 11th – August 15th 2014
As the week began the British pound started on 1.6804 against the US dollar. As we were wondering whether it could improve on this it dropped to 1.6782 on day one. This wasn’t the most encouraging start but it was followed by several other poor days of trading as far as the pound was concerned. The lowest point came on Thursday as it hit 1.6682. It did improve by a small amount on Friday, reaching 1.6690 as it did so, but this was the only improvement we saw all week.
Would we see a similar picture against the euro as well? The opening rate here was 1.2551 and here too we dropped back on the first day, this time to 1.2537. Even though we improved to 1.2570 the following day it would not be the beginning of a recovery. Instead the pound fell in value throughout the next few days to close on a disappointing 1.2466 on Friday evening.
Next we have the exchange rate against the Hong Kong dollar to consider. We opened on 13.025 before dipping slightly to 13.010. It soon became clear we would follow the pattern we had seen against the US dollar, as we slid back in value throughout the week. We had a similar improvement on Friday but this took us back to 12.935, which was still lower than the original starting rate we’d had on Monday morning.
Our next stop is with the New Zealand dollar. We started the week on 1.9820 and we did see a couple of good days here initially – two days that took us up to 1.9905 on Tuesday evening. Predictably though it would not stay that way. Instead we ended up with a drop in value to 1.9623 on Thursday evening, before recovering a little to close on 1.9640 on Friday.
Finally let’s see whether the British pound could put up any kind of fight against the Australian dollar. We weren’t holding out much hope and indeed it didn’t look as if anything would be possible here. We began on 1.8098 and the best exchange rate was achieved on Tuesday, as we improved to 1.8109. The rest of the week saw the Aussie dollar firmly in control, as it eventually finished on 1.7904 on Friday.
Notable events in the world of currency
A significant loss against the Canadian dollar
Here the pound lost ground too, falling from the opening rate of 1.8343 to close the week on 1.8192.
Another loss against the Swiss franc
This loss was not quite as big but it was evident. The pound started on 1.5234 against the Swiss franc but finished the week on 1.5101.
And yet more bad news against the Icelandic krona
Even here we had a disappointment, as the pound fell from 193.968 to close on 193.126 at the close of play on Friday night.
This was a disappointing week to be sure. There were no results here we could hold onto and point to for a good result. The only hope is that next week will produce some reasonable results if not a good set across the board. Perhaps if we can have some good outcomes next time around we can make up for such a disappointing week here.
It is unclear why the British pound is finding things difficult on the currency markets this time. Perhaps the answers are not as simple as we may all think. Events around the world often result in a number of exchange rates being affected, depending on what is happening. We will be watching closely this week to see if we can identify any better results cropping up. Whatever we find we will share it with you next week in our regular report.