Posted by Allison on 27 July 2009, 15:21
Well here we are again with another look at the markets to see how the various top currencies have been faring over the last seven days. Last time we saw that the results were very definitely split over two regions. The pound did very well in both Australia and New Zealand, taking both of their dollars and grabbing a much better exchange rate against the pair of them. But the US dollar, the Euro and the Hong Kong dollar all had what it took to beat the British pound back into submission, so we ended up in a worse position as far as they were concerned.
So here we are, hoping that we can do better against the US dollar and the Euro in particular. Those two currencies are very important in the grand scheme of things, so if the pound can regain some strength against them then we could indeed gain a more positive outlook. Sometimes when you check your currency converter it is hard not to be pessimistic – so let’s hope we can improve.
It has certainly been tough of late, since the currency markets coupled with the recession have produced some very rough results. And the problem is that we can really see no immediate improvement to these results. Hopefully we might be proved wrong, but as we get ready to see what happened in the most recent week of currency exchanges, it’s hard to be optimistic.
Perhaps we should leave speculation behind now and get down to the business of actually seeing what happened in the last week. So with that in mind, let’s see what the pound managed to do last time, shall we?
Okay so here we go with our look at the first currency we usually look at in this report – the US dollar. We all know that the dollar has been stronger than the pound of late - despite the fact the pound has done better at times. Perhaps now we can start to head in the right direction and tip things in our favour again.
Let’s see. Our starting point this time was 1.6201, having dropped a cent and a half on our last outing. Could we possibly regain that this week?
We always look for a good start to get us going in the right direction, but that didn’t happen this time around. By the time the markets closed on Monday, the pound had dropped back to 1.6103. So already we were nearly a cent lower than we had been previously. And we’d dropped a cent and a half over the whole week the week before. Did this mean we were heading for a bad time overall?
Let’s hope not, but let’s press on and see what happened next. Well it was almost as if the pound gave itself a scare, because just twenty four hours later the results were very different indeed. The exchange rate by the end of the day this time was 1.6315 – an incredible 0.0212 higher than it had been the day before.
So here we have two days with two very surprising results. What on earth would happen next? Could we keep up this sudden jump and hang onto a good result? Or would we slip back?
If we had hoped for a better result still on Wednesday, we certainly did get it. By the close of trading when everyone went home, the US dollar was looking positively battered. The pound had managed to put more effort into its task now, and it ended up on 1.6428 at the close of play. Just two days to go, and we were hoping this newfound strength would continue to last. But could it handle another two days of trading, or would the US dollar give us more to think about?
Well as it happened the pound did manage to get another successful result on Thursday, although it was less pronounced than the previous two days had been. This time it crept up gradually to 1.6447. But with more upward movement and one day to go, could we hang on to this advancement we had fought for over the rest of the week?
When it came to Friday there was good news and bad news. The bad news was that the pound dipped back considerably to finish up on 1.6283. But the good news was that this was still better than the week before. It meant we had added on 0.0082 altogether over the week. Not anywhere near as much as we could have done, if we had been able to hold on to the results of earlier in the week. But at least we had added on something – we were heading in the right direction.
Okay so let’s move on now and see how the pound managed to perform against the Euro. Our starting point here was 1.1655, after having lost a tiny amount (thankfully) over the week as a whole. What would happen next?
Things didn’t bode well by the end of Monday, because by that time we were already down to an exchange rate of 1.1523. But we had seen a similar pattern over in the US, so perhaps we were in store for a big jump the next day?
We were hoping, and we were right to hope as well, because we were then up to 1.1661. Did this mean we were going to see another jump the next day, and a following of the pattern we had followed in the US? It would be good to be able to do this, because at least then we would be able to add something onto the exchange rate at the end of the week.
So what happened next? We’re heading for the midweek point, and as it turned out that would mark a very slight drop in the exchange rate. By the close of play on Wednesday we were down to 1.1660. Did this mean we were on a losing streak for the rest of the week, or could we hold up that initially good performance?
Unfortunately the news was not good for us. Thursday brought a slip in our performance and we finished up on 1.1640. We had dropped against the US dollar at the end of the week, but it had only occurred at the last minute – not soon enough to cause any real damage.
But we still had one day to go against the Euro here, and the result we finished up with as everyone headed home was not a good one. The final rate for the week was 1.1556. That meant we had lost virtually a whole cent against the Euro over the course of the week – not a good result at all, leaving us wondering where we would go next.
It’s time to move on to Hong Kong now, where we had lost a total of 0.123 last time. Given the results we have seen so far this week, we were left somewhat undecided as to whether this would be a good or a bad week overall. The result against the US dollar was good, so maybe the pound could have a good week against another dollar in Hong Kong as well?
Okay well we’re starting from 12.556 this time, but if we had hoped for a good start we didn’t get it. The exchange rate that we finished up with at the end of Monday was 12.480. Did that mean we were heading for another bad result overall?
If we had been thinking that, Tuesday took us completely by surprise and showed us that you just never know what to expect with the currency markets. By the time the markets closed on that day, we were sitting on 12.644. That was a big difference of 0.164 in just a single day. Whatever would happen next?
Well we didn’t just hang on to that result, we managed to do even better as well. The midweek point brought an exchange rate of an impressive 12.732 to celebrate – but with two days still to go, were our celebrations going to be shortlived and perhaps a little premature?
Let’s see, shall we? Thursday actually continued to go in our favour, because we had managed to up things a little more by the end of the day. The exchange rate by then was 12.747, giving us hope that we could indeed have a good result against the Hong Kong dollar this time around.
Friday brought an almost expected dip in our fortunes – but it wasn’t enough to wipe out the gains we had already made during the rest of the week. We finished up on 12.619 as everyone headed home for the weekend, which meant that we had gained 0.063 overall during the course of the week. Now that was enough to warrant a celebration!
But we still have two countries – and two currencies – to go in our weekly report. New Zealand comes first, and as with the last currency still to look at – Australia – we had a good result here last time. We added on a cent to finish on 2.5932, which gives us our starting point for this week.
Monday didn’t give us the start we wanted, as we finished up on 2.5820 by the end of the day. It didn’t bode well for the week, but we have seen before that you can never tell how the week will pan out just from the result you get on a Monday.
However, it seemed as if that might not be the case this time. As Tuesday came to an end and we saw that things had got worse – leaving us on 2.5640 against the New Zealand dollar – it occurred to us that we could be looking at a bad result again here. And the midweek point was dreadful, leaving us on 2.5396 and making us wonder whether last week’s result was nothing but a fluke.
The pound perked up a bit against the Kiwi on Thursday, with an exchange rate of 2.5435 in the bag. But there was still one more day to go, and you somehow got the feeling that we wouldn’t be ending with a flourish.
And indeed we didn’t get a great result. The final exchange rate for the week between the British pound and the Kiwi dollar was 2.5290. That meant we had lost an incredible six and a half cents in a week. We have seen dreadful results against the Kiwi dollar before, but it doesn’t make it any easier to see them again.
So finally it’s across to Australia, where the result quite often mirrors the one we’ve seen in New Zealand the same week. We are hoping, needless to say, that this won’t be the case this time around.
We added on four cents to close on 2.0909 the previous week, and before the week had even begun we were wondering whether we would be able to hold onto that or not. And by the end of Monday we’d slid back to 2.0753, wiping out pretty much half of those gains in a single day.
We dipped down further still on Tuesday, going back to 2.0627. And Wednesday was very similar too, as the pound seemingly went into freefall and finished up on 2.0465. What on earth could we do about it – and was there time in the two days left to try and make things any better?
Thursday actually saw the pound pretty much stall – it had a miniscule improvement but it wasn’t noticeable within the figures we are looking at, so it stayed at 2.0465. What would happen on Friday?
The answer was another drop – this time down to 2.0364. So overall we had lost a total of nearly five and a half cents last week. This was a dreadful week that mirrored the result in New Zealand, but not a good week overall anyway. Let’s hope things get better next time?
At least we weren’t the only currency to suffer last week. The US dollar finished Monday on 1.2887, but by Friday evening it was on 1.2506. The Aussie dollar was clearly having a good week.
Yes, it seems as if the New Zealand dollar did well against more than just the pound last week. The Euro dropped from 2.2407 to just 2.1884 between Monday night and Friday night.
It was a good week for Canada though as it rose up from 0.8605 on Monday evening to a total of 0.8955 US dollars as the week came to an end. Here’s hoping it can keep that up for a longer period of time.
A fascinating study of the world markets was mentioned on the CNBC website at the end of last week. Some people have been pointing to the good results of late and saying the recession is over. But as you will see when you read this article here, the real story could be very different indeed.
So there we have it for another week. Not a good week by any stretch of the imagination for the British pound, so we are left hoping that we can bring you better news next time. Make sure you are here to find out. We’ll see you then.