Posted by Allison on 11 May 2009, 22:03
Has another week gone by in the world of currency? It certainly has, and that means we have another report ready and waiting for you. After a great week a couple of weeks back, last time we saw that whatever strength the pound had didn’t last very long. If we were lulled into a false sense of security it soon became obvious that ‘false’ was definitely the word to describe it.
We lost a fair bit of ground against the US dollar and the Euro previously, as we saw in our last report, but these weren’t the only areas where we struggled. It seemed as if every area was ‘two cents down here, two cents down there’ and that meant we just didn’t see any progress or improvement at all.
So where would we go next from the sorry position we found ourselves in last time? We are of course still hoping that the pound will start to rally in some way, although we would settle for it stabilising instead of seeming to go down all the time!
It already seems as if it is becoming more expensive by the day to try and go abroad for a holiday. As you will know if you have been anywhere near a currency converter recently, the exchange rates against the pound aren’t doing that well. Your money won’t go as far abroad as it did quite a few months ago.
So let’s see what happened during the week that bridged the end of April and the beginning of May. Will we get a nice surprise – or will we be commiserating again?
Here we are again ready and waiting to take a look at how well – or badly – the British pound did against the US dollar. Last time we finished up on 1.4604, which is admittedly better than we have seen in previous weeks, although we had lost ground last time around.
The question now was how well we could do this week. But Monday certainly didn’t get us off to the right start. By the close of play on that day we were on 1.4571- not a huge loss but enough for us to start thinking about what might happen if we started to lose ground in a big way again. After all, we have been down to the depths of an exchange rate below 1.40, so there is no reason why we might not get there again if things don’t go in our favour.
So let’s move on to day two. This at least was slightly better, as the exchange rate moved up marginally to 1.4592. This was a small difference, but any difference that goes in our favour is always going to be a good one.
But Wednesday would change things slightly. As it was, it would actually change things by quite a bit. By the time everyone headed home and the markets were closed for the day, the British pound managed to finish up by quite a significant amount – on 1.4760. That is an increase of over a cent and a half against the dollar, and considering this was a single day increase it was certainly something for the British pound to be proud of.
So what did the rest of the week have in store for us against the American dollar? Well as it happened there was only one more day of trading to come, as some of the worldwide markets were closed on the Friday. This was due to the Bank Holiday Monday coming up on the following week.
But before that kicked in we had one more day to check out. And Thursday actually went in our favour here in the UK too. By the time we headed into an early May Day Holiday weekend, the pound stood at 1.4859 against the US dollar. That meant we had managed to come out on top this week, and we had added on just over two and a half cents to our exchange rate. Not only did we win against the dollar, we actually managed to win in great style too.
But was that delightful result repeated elsewhere? Did we manage to get the results we needed across the board? We are about to find out.
The next stop on our journey is Europe, where the pound goes head to head against the Euro. Last time we left them we were looking at an exchange rate of 1.1037, after losing some three Eurocents over that week as a whole.
Once again, as this was Europe we were looking at a four day week with an early finish on Thursday. But we did have a good start on Monday, with a closing rate of 1.1101 as the markets stopped trading for the day. Could we build on this and have a similar result against the Euro that we had against the US dollar?
Tuesday’s closing figure certainly made it look as if that could indeed happen. By the time we were finished on that day we saw the pound go higher still, and claim 1.1231 against the Euro. So we had now gained over one Eurocent in a day – but could we make that even better as the final two days of the week got underway?
Unfortunately Wednesday brought news that equated to a ‘no’. By the time everyone headed home the pound had lost some ground and finished up on 1.1126. So the Eurocent we had gained the day before had gone just as quickly on this day. With that in mind, what did the final day this week have in store for us?
Well as it turned out we didn’t get out of 1.11 territory, although we did manage to up things a bit. The final exchange rate recorded before the prolonged weekend got underway was 1.1193. That gave us an increase over the week as a whole of a little over a Eurocent and a half, so once again we did manage to come out on top.
Our next stop on our usual global trip around the pound’s performances against the major currencies takes us as always to Hong Kong. The Hong Kong dollar has really been in the driving seat here for a while, although we do occasionally get reasonable results – nothing spectacular though.
Last time we left these two we saw that a loss on our part of 0.145 left the exchange rate between the Hong Kong dollar and the British pound on 11.318. So we were clearly hoping to make that loss back if possible, and indeed add on some more value if we possibly could.
So let’s see what actually happened, shall we?
Monday started on a note we would rather forget, unfortunately. By the time we had gone through a day of tussles we ended up registering an exchange rate of 11.292. So we were immediately onto a loss, giving us an even bigger target to try and aim for over the course of the week. And we should remember of course that on Friday the British currency exchange was not open, so we were effectively looking at only three more days to try and make a difference – and a dent – in the exchange rate in some way.
But if that knowledge acted as a reminder, it certainly started to do the trick the next day. That was when we managed to finish up on 11.309 against the Hong Kong dollar. So was this the start of what would turn out to be a good week after all, or would we fall back once more – as we have done on previous occasions?
If we were somewhat cynical about what could possibly be achieved here, perhaps Wednesday’s closing exchange rate was enough to dispel some of those feelings. Why should that be? Well, the reason is because we ended up on 11.439 on that particular day – which meant we had added 0.121 since the end of the previous week. All that mattered now was whether we could do anything better on the last day we had available to us this time around, or whether this was as good as it was going to get this month.
As it happened, the end result for the week might surprise you. After all, we have seen it happen so many times before that we do well to begin with, and then lose ground towards the end of the week. But that wasn’t going to happen this time around with this particular currency. This time we were going to finish the shortened week on 11.516 against the Hong Kong dollar. That meant we had added on a total of 0.198 over the week as a whole, and given recent results we should certainly see that as a success.
So far then, we have made ground on each of the three currencies we have looked at so far. Could we do the same against the New Zealand dollar and the Aussie dollar too?
Let’s find out, starting with the New Zealand dollar. Last time we lost a couple of cents against the dollar, finishing up on 2.5710 for the week. Now we often see big swings and changes against this currency, so it will be interesting to see what happened last week.
Monday certainly got off to a good start as the pound managed to bag a total of 2.5794 New Zealand dollars by the end of the day. The question now was whether it could continue heading in that direction.
The answer on Tuesday seemed to indicate that it could. By the time trading closed on that day, we were looking at an exchange rate of 2.6180. That was excellent news – but would things stay that way?
Wednesday’s closing figure almost seemed to be inevitable – had we peaked too soon? It almost seemed that we had, when the exchange rate dropped back to 2.5850. With just one day left for trading we might just find that things get worse still… but as it happened there was another trick up our sleeves. Thursday’s closing effort saw the pound pull off a nice increase, leaving us on 2.6168 against the New Zealand dollar. That meant we had succeeded here too, adding over four and a half cents onto the exchange rate in our shorter week.
But could we do the same with the Australian dollar? Last time we left it, we were on 2.0531, after a bad week which saw us lose out on a couple of cents. Could we do better this time?
Well Monday certainly wasn’t the best start. We actually finished down since the previous trading day, as we recorded an exchange rate of 2.0424. Could we improve on that bad start and get back on track?
Tuesday seemed to indicate that we could. That was when we managed to bag a better result and finish on a much better figure of 2.0790. But unfortunately that big single day increase wasn’t going to last.
Wednesday saw the figure fall back to 2.0510, and the final day of the trading week fell further to 2.0312. That meant that all in all, we actually lost ground here – the only main currency this week that we did lose ground on. The total was a little over two cents, so it clearly hasn’t been a good couple of weeks for us against the Aussie dollar.
But all in all not a bad week for the pound, so we should look at the good results.
It seems we weren’t the only currency to have troubles against a revitalised Australian dollar last week. The Euro fell from a closing rate on the Monday of 1.8397, to a finishing figure of 1.8146 at the end of the week.
The US dollar had a good week against the Japanese yen. It closed on 96.624 on Monday, but by the end of the week it had bagged an exchange rate of 98.184. This was a good improvement for the US dollar.
It wasn’t the best week for the Japanese yen, as it also lost ground against the Swiss franc. Monday saw the franc close on 84.109, while four days later that figure had improved to 86.512.
If you haven’t yet caught up on the latest currency news from other websites, check out the Xe.com news page, which is at this link. This catches up on Forex news and currency news so many people find it useful for more than one reason.
So there we are – another week has come to an end. And it was a pretty good one for the British pound, with good results against four out of five main currencies. Let’s hope we do just as well next week.