Difficult Times Ahead for the British Pound
Posted by Allison on 3 June 2014, 16:41
We shall waste no time getting started today, as we have plenty of results to bring you. They’re not the best you could hope for though.
An overview of the currency markets for May 26th – May 30th 2014
Let’s begin with our usual look at the position between the British pound and the US dollar. The opening rate was 1.6840 but this soon dropped to 1.6835 on Monday. The pattern was repeated on the following day as the pound fell further to 1.6816. Clearly this wasn’t going to be a good week for the pound as it then fell below the 1.68 mark altogether. The low point was reached on Thursday as the pound dropped to 1.6712 but at least it rose slightly on Friday to close on 1.6734.
Would we end up with this kind of performance against the Euro as well? We opened on 1.2355 and once again saw a disappointing start to the week. The pound finished day one on 1.2347. It took a day longer to drop below that level, falling to 1.2277 by Thursday, but once again we did at least manage to get in a better exchange rate on Friday. Here we finished on 1.2298, pulling back a small amount of our losses.
It soon looked as though this would be the story of the entire week. Indeed we began on 13.054 against the Hong Kong dollar and although we only lost 0.001 on day one, things soon accelerated – and not in a good way. We found ourselves on 12.984 on Wednesday but after another day of losses on Thursday we once again stopped the rot on the final day of the week. This saw us close things out on 12.973. This wasn’t going to be a memorable week for a good reason.
Off we go to New Zealand now so we can check out the situation there. The pound began on 1.9715 and we saw the now predictable drop, this time taking us to 1.9699. Another drop to 1.9672 took place on Tuesday before we improved mid-week, finishing Wednesday on 1.9740. We then saw a couple of ups and downs that took us back below 1.97 on Thursday before finishing on 1.9747 on Friday. This was actually the first good result we’d seen all week, bringing us to a higher result than we’d started on.
Finally the pound began the week on 1.8264 against the Australian dollar. We then found ourselves propelled into a series of losses that took us right through to Thursday night. Instead of following the reasonable pattern we’d seen against the New Zealand dollar we followed the more disappointing pattern we’d seen elsewhere. So by the time Friday arrived we closed on a lower rate of 1.7999.
Notable events in the world of currency
More bad news against the Canadian dollar
Here we ended up dropping back from 1.8357 to 1.8134 as the week went on.
A smaller drop against the Swiss franc, but it is still a drop
Disappointing news was on the cards here as well, as the pound started on 1.5086 but finished the week worse off on 1.5009.
The same pattern was repeated in China as well
Here too we had bad news. The pound began on 10.504 against the yuan and soon finished up on 10.456 on Friday night.
As you can see it was far from a good performance last week by the pound. There are always good points you can find from any weekly performance – usually anyway – but last week we were hard-pushed to find any news that might provide cause for celebration.
Hopefully we can find better news next week, even if we don’t have a wide range of great results to celebrate. Even a couple of reasonable results would be better than the ones we looked through this time around. We rarely get a week that looks like this; perhaps we were overdue for some disappointing results.