How Would the British Pound Navigate the Festive Season?
Posted by Allison on 4 January 2017, 13:13
Christmas is approaching fast, which means we will have a couple of shorter weeks to contend with on the currency markets. Before we reach that stage, however, we have the final full trading week of the month – and of 2016 – to look at.
An overview of the currency markets for December 19th – December 23rd 2016
This can be a strange week on the currency markets, and this time we will be looking at the figures right up to the day before Christmas Eve. The pound started the week on 1.2443 against the US dollar, but soon fell to 1.2386 to start the week. Things didn’t get much better the day after either, as the pound fell further to 1.2341. It did recover somewhat midweek, rising to 1.2370, but the remaining two days were poor as well. This meant the British pound finished on just 1.2249 against the US dollar for the week.
With that out of the way, we were half-expecting a bad show against the euro too. We began the week on 1.1920 before dropping to 1.1884 on Monday night. Tuesday was better though, as the pound rose to 1.1907. Was this the sign of better news to come as we rolled towards Christmas Eve? No – the week from that point on was very disappointing for the pound. When Friday night arrived, the pound was on 1.1726 – much lower than it had started the week on.
So, could we expect a poor showing against the Hong Kong dollar as well? It didn’t take much to work out the answer to that question. We started on 9.6593 before two bad days took us down to 9.5851 by Tuesday night. Things then got better as we perked up to 9.6019 by Wednesday evening, but we still had two days to go. As it turned out, those two days were far from good and we finished on a disappointing 9.5064.
Off to New Zealand now, to see how the British pound would do there. We began trading on 1.7751 before enjoying two good days to start the week. This took us up to 1.7896 by Tuesday night, so we had a good start. From then on, we had disappointing results, although the losses were small and meant we finished on 1.7818 by the time the week was up. Yes, this meant we still finished in a better state than we had started in.
Finally, it’s time to see whether we could perform well against the Australian dollar. From an opening rate of 1.6973, we managed to rise to 1.7056 by Monday night. However, we didn’t match the pattern we had seen against the Kiwi dollar. Instead, we experienced an up-and-down pattern that meant we were never quite sure what was going to happen next. By the time Friday night arrived, the pound had stalled on 1.7080, which again was better than we had started with.
Notable events in the world of currency
A drop against the Canadian dollar
It seemed you could never quite be sure what was going to happen next this week. The pound started on 1.6640 against the Canadian dollar, before falling to 1.6554 by Friday night.
A drop against the Swiss franc
Here we ended up much lower down when we finished compared to the starting rate of 1.2815. When Friday night arrived, the pound had sunk to 1.2560.
A steady fall throughout the week against the Icelandic krona
There was nothing we could do to prevent a poor result here. We started on 141.764 and did not have a single good result all week against the krona. We finished on a disappointing 139.270.
So, we can see this was not the best of weeks for the British pound. However, we can perhaps hope for better during the shorter Christmas week itself. We shall soon know for sure as we look forward to seeing how the pound would perform during those few days between Christmas and the New Year. It will be interesting to see how the pound will finish 2016.