Posted by Allison on 4 August 2009, 11:02
Welcome back to our usual weekly look at what has been happening in the currency market since our last report. And we are certainly hoping for better news this time around, since previously we have seen bad news in the way of improvements (or lack of) for the pound.
Last time we had two good results out of a possible five, so you can see that things aren’t exactly brilliant at the moment. Those other major currencies are definitely in the driving seat when it comes to trying to grab a good result for the week.
But still, we did have some good results where it mattered. For example, the US dollar was not able to get a leg up against the British pound last week. It had slid back by well over a cent by the time the week closed, so at least we were doing well there. The Euro did get the better of us, but not by much. The difference was thankfully infinitesimal over in Europe, so if you were checking your currency converter you would have had to look twice to see any notable difference there.
The second of the two good results we had was over in Hong Kong. We added a reasonable amount on to the exchange rate there, so that at least was very good as well.
But what happened during the last few days? Could we up our percentage of gains versus losses? Or would we have another lacklustre week? Let’s find out as we go into our report proper.
Okay so here we go with this week’s look at what happened between the pound and the US dollar last week.
The final exchange rate of the previous week had settled on 1.6409, after adding on a total of 0.0126 all in all. So did we get off to a good start, or was it downhill from the beginning?
Well as it happened it was good news from the start here. We managed to add on something on the very first day of the week, with 1.6490 being the closing figure on that first day. Could we manage to get things right and carry on from here?
Let’s find out. As it happened we managed to keep going in the right direction on Tuesday as well, although we did lose a bit of ground here. By the time the markets closed on Tuesday we had stopped on 1.6503. This was actually a smaller jump but it seemed more, perhaps as we had crossed into 1.65 territory. The question was whether we could carry on upwards for the rest of the week.
Wednesday brought us down to earth with a bump though. That was when we ended up on 1.6379 – signalling a loss of over a cent since the day before, and making us wonder whether that was it in terms of increases for this week. We could do with another good week here, but had we blown it?
Fortunately as we were bracing ourselves for bad news on Thursday, we ended up being surprised by some good news instead. We finished up on 1.6486 for the day, as we put in a surge of energy to grab a better result. The only question now was whether we could keep that going for another day and finish the week in a better position than we had been the week before. Was it possible, or would we slide back again as we had on the Wednesday?
As it turned out the news was good – very good indeed. As Friday came to a close, the last few exchanges were done and everyone quit for the week, we finished up on 1.6524. That is higher than we had been all week, and it meant we had added on a total of 0.0115 all in all. That means an increase of just over a cent again against the US dollar. That is what we call a good result!
So let’s move across the water now to see if we can do just as well against the Euro. We stumbled here last time though, so it seems even more important to make sure we get a good result.
Our closing rate last time was 1.1534, and by the end of Monday we had managed to snag a small improvement which left us on 1.1556. Only very small as you can tell, but it was enough to make sure we started off on the right foot at least.
But what did the rest of the week have in store? Well Tuesday managed to keep going in the same direction, as the Euro was beaten back slightly by the British pound and it meant we finished on 1.1598. Could we keep this up, or would we finish up lower than we had last week?
Wednesday saw the midweek point marked by another good result though. It certainly seemed for the moment as if things were getting better and better. The final exchange rate for that day was 1.1613, so things were still going in our favour. The only question now was whether they would continue to do so over the next two days.
If we were almost bracing ourselves for a big drop we certainly didn’t get it on Thursday. In fact we went in the opposite direction again! By the time the markets closed on that day we were standing on 1.1731. Could we keep this up for another day, when we had done well all week? Or would the Euro come in and ruin things for us at the last minute?
As it happened the Euro did fight back and it did regain some of its own losses. But it was too little too late as far as the week as a whole was concerned. By the time the markets closed on Friday night, signalling the end of the week, the pound stood at 1.1687 against the Euro. This meant we had added on a Euro cent and a half, which was excellent news for us. And it meant we had got two good results so far.
But there are still three to go, so what happened against the Hong Kong dollar?
We did well the previous week and finished up on 12.717, so we were looking to improve on that. We started well too, with a closing rate of 12.780 on Monday evening. Was this going to repeat the pattern we saw in both the US and Europe, with the pound steadily doing better during the week as a whole?
Tuesday did seem to confirm that as we finished on 12.791 as the day came to a close. But this can be a long week, and even if those first couple of days were good we still had three to go. Could we manage to persevere and improve on those early results?
As it turned out Wednesday did provide a similar dip to the one we had seen in the US. By the time the markets closed that evening the pound had bagged 12.693 against the Hong Kong dollar. But as we know we had bounced back quickly against the US dollar – so could we do the same here?
Well it certainly seemed promising as we had finished up with a bounce back up again on Thursday, pushing us back to 12.776 in total. With just one day left to go and the hope that we could produce three good results out of three, what actually happened?
If we were hoping for a better result to finish the week with, we did get our wish. As Friday came to an end, marking another week over with, we finished on 12.806. That meant we had added on a further 0.089 over the week as a whole, giving us something to celebrate and something to think about for next time.
Let’s move on now to see what happened against the New Zealand and Australian dollars respectively. We lost three cents against the Kiwi dollar last time, so we were hoping for much better this week. But did we get that wish?
We started on 2.4986, and by the end of Monday that had changed to 2.5074. Could this be another good sign?
Before we could start to celebrate we finished up sinking lower again and ending on 2.4972 the next day. So it was clearly not time to celebrate just yet, although we could still recoup our losses and turn this into a much better week than we have seen against the Kiwi dollar for a couple of weeks at least.
Wednesday didn’t bring better news though, and as we finished on 2.4918 we were left waiting for the improvements we wanted. Could we deliver anything better for the two remaining days of the week?
As it turned out the answer was yes – but the next day was the one that really did it. We managed to climb up and claim an exchange rate of 2.5287 against the Kiwi dollar on Thursday. With one day to go, could we hang onto that increase?
As it happened we did slip slightly and ended up on 2.5219 at the end of the day. But it wasn’t enough to wipe out all the hard work of the week. We ended up better off by well over two cents in all, so once again this was a good result for the British pound.
Now could we make it five out of five for this week?
Last time we finished just over the two dollar mark against the Aussie dollar on 2.0084. We dropped back slightly on the Monday as we finished up on 2.0028. Was this a bad omen for the rest of the week or was there better news in store?
If there was better news on the way we would have to wait for it. Tuesday finished up even lower on 1.9877, so we were in a tough spot early on in the week.
Wednesday saw us climb slightly higher again but it wasn’t enough to get back over the $2 dollar mark. We ended up on 1.9997 at the end of the day, and we didn’t make any headway on Thursday either. The closing figure that day was actually slightly lower at 1.9992.
So it seemed as if the Aussie dollar was going to be the one result of the week that didn’t go our way. And we were right, unfortunately, as we finished up on 1.9939 at the close of play on Friday. That meant we had lost out on around a cent and a half over the week as a whole.
All in all it was a good week though, marred only by our loss against the Aussie dollar.
It was clearly a good week for the Aussie dollar as it gave the Kiwi dollar something to think about. The Kiwi dollar started on 0.7987 and dropped to 0.7906 by the end of Friday. This was after hitting 0.8025 at the midweek point.
The Euro sank from 1.4269 at the end of Monday to 1.4138 just four days later last week. Could it improve again in the days and weeks to come?
From a closing rate of 0.129031 on the Monday, the Hong Kong dollar finished with very little difference at all on Friday. By that point it had crept up to 0.129032.
CNBC always has plenty of good articles to read, and this one gives us some good current Market Tips. Go to read what the experts say on the matter.
Well that’s it for this week, and it has been a good week all in all as well. We shall be back at the same time next week to provide another report for you on the ongoing currency market. We’ll see you then.