Many More Challenges Ahead for the British Pound
Posted by Allison on 18 July 2016, 15:05
So here we are again, after a tough week for the pound last week. Now the initial shock of the Brexit vote has settled down, perhaps we can consider where the pound will go from here. The answers – at least so far – are below.
An overview of the currency markets for July 11th – July 15th 2016
We know what happened last week, so the big question here was whether the British pound could regain some of those losses. We began trading on 1.2986 against the US dollar on Monday, and we dropped slightly to 1.2984 by the end of day one. Only a small drop though, so perhaps there was no immediate need for alarm. Indeed, as it turned out, things would get progressively better – at least early on in the week. After rising to 1.3161 to finish off Tuesday, the pound went through several better days, resulting in a closing rate of 1.3391 on Thursday night. We did dip to 1.3362 on Friday, but this was better than we had been expecting.
Over to the euro now, which is of particular interest for obvious reasons. We got a better start here, too, as the pound went from an opening rate of 1.1731 for the week to 1.1751 on Monday night. We actually achieved far more than that as well, because the ongoing improvements to the exchange rate happened day after day this week. By the time Friday night came around, we ended up achieving 1.2008 against the euro, which was encouraging to say the least.
Now we go over to Hong Kong, to see whether the British pound would improve against their dollar as well. It certainly seemed as if things were settling down to some extent, but would this continue with other currencies as well? The pound got off to an encouraging start by rising from its opening rate of 10.073 to 10.074 on day one. This was only a small increase though, so what else would be in store? The answer was another three days of rises that took the pound to 10.387 by Thursday evening. It did drop back to 10.361 on Friday, but this was still far better than we had been expecting.
Our fourth stop is the New Zealand dollar, where the pound began a fresh week on 1.7856. We had a good start by rising to 1.7920 on Monday night, but there was plenty more good news in store as well. In fact, by the time we got through to Friday night, the British pound had soared back up to 1.8653. That was a great result.
Could the British pound do just as well in Australia too, though? It didn’t start as well, as it dropped from 1.7281 to 1.7176 on day one. However, it then proceeded to do rather better, rising to 1.7510 by the time Thursday evening rolled around. There was one final drop on Friday, to 1.7457, but all in all the picture looked rather better this week.
Notable events in the world of currency
Another rise against the Canadian dollar
Here the British pound went up from 1.6899 to 1.7192 by the close of play on Friday.
A much better result against the Swiss franc as well
Things were definitely looking up this week, and the pound rose from 1.2734 to 1.3087 here.
More good news against the krona
The pound also got the better of the Icelandic currency, rising from 159.836 to close on 162.251 on Friday night.
So we have a very encouraging week here all in all. Of course, it remains to be seen whether this pattern will continue, and the pound has not made up all those initial losses. But it has bounced back very encouragingly, which is a good sign at the moment. We will be following its progress very closely indeed, and we’ll reveal all the latest news right here as well, so make sure you revisit often.