Summary Of Currency Markets For June 1st – June 7th 2009
Posted by Allison on 9 June 2009, 10:00
Last week’s report made very interesting reading. It was clear that the pound was enjoying a good and prolonged run of strength when it came to the US dollar, the Euro and even the Hong Kong dollar. But when it came to going up against the New Zealand dollar and the Australian dollar, things were very different indeed.
The differences may not be huge, but it was more the fact that in recent weeks we don’t seem able to get a grip on these two currencies. We’ve seen before that things here can be a bit up and down – gaining a lot one week only to lose most of it the next. But at the moment we just don’t seem to be able to get good results here as we have elsewhere, particularly against the US dollar.
For anyone wanting to head out to America at the moment, they must be more excited by the fact that their currency converter has been returning better figures than we have seen in quite a while. We are a long way off being back to two dollar territory but at least we have been given something to be joyful about.
But now we are into June, and the biggest event in the week in question is arguably the European elections. While we aren’t interested in the politics as a whole, what is going on in this department can have an effect on the exchange rates between specific countries.
And since the UK parliament has been through very rough times of late – particularly in the last week or so – it could well be that this has a direct effect on the value of the pound.
So let us see whether this has indeed been the case.
An overview of the currency markets for June 1st – June 7th 2009
The last exchange rate we had the previous week against the US dollar was an impressive 1.6150 – a good two cents up on where we had been when we started that week.
So we had a good platform from which to begin our first week in June. Let’s see what we managed to do with it.
Well if we wanted a great start to the month we certainly got it. On that first day we managed to push things up to an impressive 1.6382. That’s more than two cents higher than we’d finished the week before. Was this the start to another phenomenal week, or would the elections and uncertainty surrounding our government lead to other countries losing faith in the value of the pound?
As it happened there was another good result the next day too. By the close of play on Tuesday we were higher still, hammering down the US dollar and asserting our authority with an exchange rate of 1.6456. Could we keep this up and finish the week even more strongly than we had started it?
The midweek point is always rather interesting, and this week was to be no exception between the British pound and the US dollar. Once trading finished on the 3rd June, the exchange rate was up again – this time sitting on 1.6525.
But unfortunately that was to be the peak of the week, and we wouldn’t get any higher. As is normal in the UK, the elections were held on the Thursday – and it was supposed that the voters would get their own back, showing their anger at the state of the government.
Whether this was the reason for Thursday’s figure or not, we cannot say. But it seems too much of a coincidence to suppose that a closing exchange rate of just 1.6221 on Thursday was down to anything but the state of the government. That is a loss of over three cents in a single day.
And Friday didn’t get any better either. We slumped again as the week came to a close, and finished on 1.6124. All those gains from the early part of the week now seemed like a distant memory. They did mean that the big slumps only actually translated into a loss of 0.0026 overall though, so it could have been a lot worse.
But how would those elections play a part when it came to going up against the Euro?
Last time we were left with an exchange rate against the Euro of 1.1456. But with the European elections underway would that make a difference here? Let’s see what happened.
Well we had a similarly good start to the week as we’d had with the dollar. By the close of play on Monday we were on 1.1520. That was nice and respectable, and it gave us something to build on too. Tuesday saw another slight climb to 1.1558 – not as much as the day before but still worth having. Where would the rest of the week take us?
Wednesday brought more good news as we managed to get up to the heady heights of 1.1631. Now that is the kind of figure we could only have dreamed of a few months ago – but this is where things went wrong against the US dollar. Would it happen again here?
Unfortunately Thursday did indeed see a dip in the exchange rate, and by the end of the day’s trading we were at 1.1508. With just one day to go, and elections taking place all over Europe, what would people make of the strength of the pound now?
As it happened the answer seemed to be a rather negative one. By the close of play on Friday, as everyone headed home for the weekend, we were left on 1.1373. That meant we had lost a little under a Euro cent all in all. That may not sound like a huge loss, but we had been doing well against this currency over the last couple of weeks, and losing ground now was a disappointment. Perhaps it was too much to expect to think that we could keep it up, but we suspect that the fiasco surrounding our government at this time was such that it gave other countries a negative view of us.
And who could blame them?
Let’s move on now though and take a look at whether we could do any better against the Hong Kong dollar. We had a great result last time around, with a final exchange rate of 12.518 to start work with this week. Let’s see whether we managed to increase that standing.
In the next few moments you might assume that there is something of a pattern developing in all the results we are sharing with you this week. We started off well once again on the Monday, with an exchange rate of 12.698. That certainly got things off to a good start, and they continued on Tuesday with a closing rate of 12.756 to get talking about.
But as much as these are good results, it is also the case that we’ve seen this pattern developing already with the US dollar and the Euro. And so far it looks as though it is being matched with the Hong Kong dollar too. So let’s see if we are about to get another good result on Wednesday, followed by a slide downhill.
The midweek point against the Hong Kong dollar did indeed bring a good result, with another increase to 12.809. But as we suspected this would be the best that it would reach.
On the 4th June, the day that Britain went out to the polling booths, the pound dropped sharply against the Hong Kong dollar and slipped back to 12.574. With that occurrence happening it didn’t really come as a surprise to see that there was another slip in store on Friday. The week finished on 12.498 all in all, and this meant that we had only lost out on 0.02 in total. But it was still a loss, and still another piece of evidence that pointed to the fact that the last two days of the week were bad news for the pound.
Let’s move swiftly on to New Zealand, where we lost three cents last time and finished up on 2.5358. Would we see the same pattern here, or was there something else in store for us?
We actually slipped back on Monday, so that broke the pattern immediately as we fell back to 2.5248. Things continued in the same vein on Tuesday, as we finished up on 2.5158. So we were clearly in a new area completely here, as it became even more obvious on Wednesday.
Why was this? Well, the midweek point in New Zealand brought an exchange rate that suddenly shot up to 2.5605! And there was more to come the next day as we finished up on 2.5871.
Unfortunately that was where the good news ended. Just as we thought we might actually get a resounding result at the last minute, things changed before it had a chance to manifest itself. The final rate for the week, recorded as the markets closed, was 2.5321. We had dropped five and a half cents in just twenty four hours, but luckily the whole week had seen us drop a mere 0.0037.
So where did that leave us in Australia? This is our last currency to take a look at, and with dismal results so far we don’t hold out much hope of a good result here either. In addition, the Aussie results can quite often mirror the Kiwi ones, so let’s see what actually happened.
Last time around we finished on 2.0244, so there was very little difference to be had on Monday when we closed on 2.0221 for the day. Was this to be a week of small changes, or was there a bigger shock in store?
There was another drop on Tuesday, as we found the exchange rate had dropped further to 2.0160 by the close of play. The midweek point loomed, and it didn’t look as if we were going to achieve too much by then.
We did actually manage to push things back in our favour though, with a closing rate of 2.0255 on the Wednesday. And things looked even rosier the next day, as the exchange rate climbed to 2.0407.
But the problem is that we know how things dropped from that promising looking point elsewhere. And we know that just because things look good, it doesn’t mean they can’t slip and fall at the final hurdle. And that is exactly what happened here once again.
Friday’s closing rate dropped down to a dismal 2.0025 – leaving us over two cents down on where we finished the week before.
Not a good week for the pound then, and there was precious little to celebrate once we were into the second half of the week.
Notable events in the world of currency
Euro has reasonable week against Aussie dollar
The Euro finished on Monday by bagging 1.7552 Aussie dollars, but by the close of Friday that was up to 1.7606. Not much of a difference, but enough to edge ahead.
Two dollars go head to head
When the US dollar and the New Zealand dollar went head to head last week, it turned out to be the US dollar that was firmly in the driving seat.
At the end of Monday it was on 1.5412, but by the end of the week that had soared up to 1.5703, adding nearly three cents onto the exchange rate.
Indian rupee dips then regains balance against US dollar
There was really very little difference between the two currencies all week. But the rupee went from 0.02128 on Wednesday down to 0.02118 on Thursday, before correcting itself again and returning to 0.02125 to finish out the week.
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So that’s it for another week. We’ve seen that the run of good weeks for the pound seems to have come to at least a temporary end. It will be interesting to see if it can regain some strength next time around.
We’ll see you next week.