Not a Solid Week for the British Pound
Posted by Allison on 6 March 2017, 13:38
We already know the pattern that was in store this week, but how would things look up close? We have the data to reveal the answers.
An overview of the currency markets for February 27th – March 3rd 2017
Some weeks are natural challenges for the British pound, and it quickly looked as if this would be one of them. The currency began on 1.2554 against the US dollar, before falling to 1.2414 on day one. We did do better on Tuesday, rising to 1.2422, but this was hardly a big success, and it was followed by three disappointing days. This meant that by Friday night, the pound was significantly lower on 1.2234, which did not put it in a good place overall.
We would say the pattern was almost identical against the euro last week, yet it was worse. We failed to net even a single improvement all week, which meant we once again finished with a much lower exchange rate than we had hoped for. We began trading on 1.1833 and fell steadily day after day, until the pound stalled on 1.1580 by Friday night. Where would we go from here, and would the Brexit discussions and forthcoming trigger of Article 50 mean there would be other struggles to come?
The week started on 9.7441 for the pound against the Hong Kong dollar, and the progress (or lack of it) here exactly mirrored that of the pattern against the American dollar. We began with a drop to 9.6346 on Monday, before rising marginally to 9.6421 the next day. From then on, it was drop after drop, and that led to a closing rate on Friday evening of 9.4992 in this part of the world.
Moving on to our next stop, we come to the New Zealand dollar. The picture would turn out to be very different here, after the initial drop on Monday from 1.7408 to 1.7238. From that moment on, we experienced a rise every single day until Friday evening, but because of the size of the initial drop, it was only a case of recouping some of our losses. So, while the week looked good at first glance, it was still a case of losing out overall. We finished on 1.7382 on Friday, so we were still behind here.
The pattern was somewhat different against the Australian dollar, too, where things changed daily and we didn’t know where we would end up next. From an opening rate of 1.6349, we fell to 1.6177 on day one, before perking up to 1.6185 the following day. From there, it was one step back, one step forwards and one step back again. All of this resulted in a closing rate of 1.6161 on Friday, which was still a big drop overall.
Notable events in the world of currency
Another fall for the pound against the Canadian dollar
At least the rot here was not quite as severe, as the pound fell from 1.6457 to 1.6398 by the end of the week.
A more significant fall against the Swiss franc
There was a notable drop in this part of the world, though. The pound began trading on 1.2601 on Monday morning, before falling sharply to reach 1.2361 by Friday night.
Once again, the pound loses out against the Icelandic krona too
There was no chance of any good results to be had this week, as was indicated here as well. The pound began on 135.647 against the krona, before dropping to 130.607 by Friday.
So, things were not good for the British pound this week, and we became almost numb to the falls in the exchange rate. It was clear the currency was struggling against the ever-changing situation regarding Brexit. Perhaps once Article 50 is triggered and things become clearer, we can look forward to the pound beginning to turn the corner.
Only time will give us the answer to this one, so we must wait and watch and see what happens.