Could the British Pound Follow One Strong Week with Another One?
Posted by Allison on 9 May 2016, 15:01
We all know some weeks are better than others with regard to the currency markets. Let’s see whether this week would prove to be a good one, or not so much, for the British pound.
An overview of the currency markets for May 2nd – May 6th 2016
After the excellent results we had last week, it wasn’t long before we had more good news to start with this week. The pound began trading on 1.4614 against the US dollar, and this rose to 1.4687 by the end of Monday. However, it wasn’t to last. Perhaps inevitably, the pound then began to slide, and after a couple of days it had dropped to 1.4511, dropping over a cent in the process. While that was bad enough, there was more bad news to come as well. By the time Friday evening rolled around, last week’s good results were but a distant memory. The pound stalled on 1.4492 as the week came to a disappointing end.
Over in Europe, we started the week on 1.2816 against the euro. Here too we weren’t going to have a good time, but the bad news started immediately. After two days’ worth of trading, the pound had dropped to 1.2641. This alone made us wonder whether last week was something of a fluke. After another drop the following day, the rot stopped as the pound rose to 1.2680 on Thursday. One final piece of good news on Friday meant we finished on 1.2682 for the week.
Hong Kong will be the next stop now, where the pound began life on 11.338 this time around. We had one good day here, right at the start, as the pound improved to 11.395. However, we then had four disappointing days, just as we had against the US dollar. Very often we do see the dollars mirroring each other, and they certainly – and unfortunately – did just that here this week.
The week began with the pound trading on 2.0963 against the New Zealand dollar, but here the pound wouldn’t follow that pattern. Instead, it dropped to 2.0918 on the first day before rising to 2.1024 by Wednesday evening. We had no idea where the final two days of the week would take us, but fortunately it all worked out in the pound’s favour in the end. By Friday night we finished the week in better shape on 2.1181.
So where would the pound end things against the Australian dollar? We managed to open trading on 1.9157 and take things higher to 1.9201 on day one, but would we be able to continue in the same vein? Actually, yes, we would. After two strong days of trading we finished on 1.9397 on Wednesday evening. Now you might assume we then dropped in value and we did, but only by a small amount (to 1.9358). With another rise, this time to 1.9658, on Friday, we did have a great week here to cap things off.
Notable events in the world of currency
A strong performance against the Canadian dollar
The British pound began the week on 1.8309 here, but we soon improved on that with day-on-day increases throughout the week, ending on 1.8664 on Friday.
A slight drop against the Swiss franc
Things didn’t look good here from the start. We began on 1.4077 before dropping to 1.3865 by Wednesday night. We did recover somewhat, but Friday saw the pound finishing short on 1.4039.
A fall against the Icelandic krona
Here we started on 179.378 before dropping almost continually to finish the week on 176.917.
As you can see, there were some encouraging results last week – and some surprising ones too. However, it was not enough to create another sterling week of good results for the British pound (pun intended). Perhaps next week we can improve across the board, but for now at least, there will be some reasonable results to pick out of the uneven week we experienced on the markets.