Posted by Allison on 16 April 2009, 11:35
If you read our weekly report last time around, you will remember that we didn’t have much good news at all to report. We always look at five major currencies, and while we dropped back against all of them we saw a major drop against the New Zealand and Australian dollars.
Let’s face it, these are depressing times and the pound is struggling to maintain any kind of power at all. We could see it go a lot lower than it is at the moment before it hits rock bottom. The currency converter is returning different figures every day, and that is likely to continue for long into the future. Of course small alterations are quite normal, but bigger ones as we have been seeing are a result of the recession.
Before the current situation came to light last year, it was quite enjoyable to see what was going on with the pound each week. Would it have a good week, or would it lost some ground? We were never in a situation where we would lose a huge amount of worth over the course of just five days – and yet now we wonder whether that will be the case virtually every single week. We can only hope for an average week – a really good one seems almost out of the question.
But let’s see what happened in the last few days, and whether the pound has been able to fight back in any way.
If you are a regular reader you will know that we always start with a look at how the pound performed against the US dollar. The week before saw a woeful finish, as we registered just 1.3996 US dollars to the pound after we lost over two cents that week. Could we do any better and get back into the $1.40s this time around?
We were so close to the 1.40 mark that it only needed a slight push to get us over it. So it came as a heartening surprise to discover that by the end of Monday we were on 1.4167 dollars to the pound. That was a boost of 0.0171 cents on just the one day, so we had got off to the perfect start. The only question now was whether or not we could keep it up.
Tuesday’s performance was nothing short of cruel after our hopes we raised in such a remarkable way on Monday. By the end of trading on Tuesday the exchange rate was pegged at 1.3968. We’d actually dropped below the point we were at on the previous Friday, even if not by an awful lot. What on earth could happen next?
Wednesday brought a little better news, but really only a little. We managed an increase of just 0.0013, taking us back a lot closer to the 1.40 mark, but not tipping us over it at all. We ended the day on 1.3981. What would the second half of the week bring? Could we hope for better results?
As it turned out, no one could have expected the final figure we ended up with by the time Thursday’s trading had come to a close. Would you believe the closing exchange rate had gone up to 1.4535? We couldn’t have dared to dream of such an increase in the space of a single day, mounting up as it did to some five and a half cents. Did this mean we might just have a good week after all?
Well we did – perhaps predictably – lose some ground on Friday. But it wasn’t anywhere near as much as you might think. The final figure for the week, reached as everyone finished work and headed home, was an impressive 1.4421. So we did lose out on the high of Thursday, but when you compare this figure to the final figure from the week before, you will see that we did in fact have plenty to celebrate. We had actually gained over four cents this week – 0.0425 to be exact – so this was really something to be glad of. Let’s just hope it isn’t a one week wonder!
The next thought is of course whether we managed to replicate this result anywhere else in the world. Our weekly report still has the Euro, the Hong Kong dollar and the New Zealand and Australian dollars to take a look at, so could we be in for similar good results there?
Let’s find out by moving swiftly on to European single currency now. The last time we left it our pound was claiming just 1.0845 Euros, so we were hoping to move away from the ‘one for one’ danger zone as far as possible. Did we manage to do it?
Well there was a very slight improvement on Monday, as the pound pushed up to 1.0863 Euros. That was a marginal difference from the previous trading day, and it didn’t really give us a picture of what we might be able to expect for the rest of the week.
Tuesday’s closing exchange rate did give us more room for thought however. The final figure on that day slipped slightly to 1.0793. So were we looking at a very different pattern to the one we had seen with the US dollar? It certainly wasn’t looking quite as rosy at this point – and there was more to come as well.
Unfortunately Wednesday saw a further fall to 1.0648. Did that mean we were on a downward spiral now for the rest of the week? We were hoping this wasn’t the case, but it didn’t look good and somehow a repeat of the good news we’d had in the US didn’t look as if it was on the cards.
There was indeed another drop in the exchange rate on Thursday, although it wasn’t a large one. That at least was a tiny bit of good news, although with the rate stalling at 1.0632 it still didn’t really give us anything to celebrate. This was after all an exchange rate that has continually been getting lower and lower as time has gone on. Seeing it climb in favour of the pound would be good news, if it happened on a continual basis.
So what did Friday have in store for us? It was too much to hope for that we would see a huge climb, and we certainly didn’t get one. But there was a small climb on the cards, which left us on 1.0643 as the week came to a close. That meant we had still lost a couple of Eurocents since the same point last week however. We really need to see some kind of improvement next week.
Moving on now to Hong Kong, let’s see whether the pound could get a good result here against the Hong Kong dollar. Last time we finished up with an exchange rate of 10.851, so could we improve on that?
Well Monday certainly got off to a good start. By the close of play on that day the exchange rate had pushed up to 10.983. Could we carry on with this and get a good week in against the Hong Kong dollar?
The answer appeared to be no, judging by the next result we got back on Tuesday. By the end of the day we’d lost ground and ended up on 10.828. Was there any way we could improve on that and turn this into a good week after all?
Wednesday saw a marginally better result, although it didn’t exactly make any headlines. The exchange rate by the end of that day was 10.838. So we had just two days to go and we were hoping for something better to finish off the week with.
And it seemed as if we actually got it on the following day. The rate improved markedly for the British pound, as we finished up on 11.267. But could we hang on to our new rate for one more day?
Well we dropped back a little bit, but not enough to result in a loss for the week. In the end the final exchange rate for the week was 11.177, which meant we had gained 0.326 over the course of the whole week. That was something to celebrate, and it gave us hope that we might just achieve something more the following week as well. We’ll see.
We had a dreadful time in New Zealand the week before, with a loss of some fifteen cents and a final exchange rate of 2.6688. Could we hope to recoup some of that loss this week perhaps?
There was no change on Monday, but on Tuesday we actually dropped back further to 2.6346. Quite often if we see a bad result in New Zealand we manage to bounce back the following week, but it wasn’t looking likely that it would happen this time around.
Wednesday seemed to confirm that, as we bounced back by just a meagre amount to 2.6358. This clearly wasn’t going to turn out in our favour this time around. To add to our woes we lost even more the following day, and finished up on 2.6157. With just one more day left and the losses mounting, it wasn’t looking good for the British pound this week.
And to add to the dreadful results, Friday ended up with an exchange rate of 2.5800. And that meant we had lost still more this week, with a total loss of nearly nine cents. Could things get any worse for the pound against the New Zealand dollar?
Finally we stop off in Australia. Here too it was a bad week previously, as we finished up with a rate of 2.1244 against the Australian dollar. Monday kicked off by giving us a marginal increase to 2.1377, but that was about as good as it got.
Tuesday saw us slip back to 2.1180, so it became clear that if we wanted to get a good result for the week as a whole we would have a battle on our hands. The losses were cut to a small amount on Wednesday, as the pound stalled on 2.1126. Which way would things go now?
Unfortunately for us the answer was down. By the end of trading on Thursday the exchange rate had gone further in favour of the Australian dollar. The closing figure was 2.1021. And as it turned out the final figure of the week was 2.0952. That gave us a total loss of nearly three cents – a lot less than the previous week but still not good news for the British pound.
So all in all it was yet another pretty bad week. Can we hope for better results in the weeks to come? Let’s hope so.
Even though the currency was seen to start fighting back in the latter stages of the week, the US dollar didn’t have a good week against many other currencies.
It is seen as being one of the strongest ones of all, so when it has a bad time everyone sits up and takes notice.
From a closing figure of 0.8010 on Monday, the New Zealand The final figure was 0.8120. dollar enjoyed an advance against the Australian dollar by the end of the week.
The Euro took advantage of a poor week for the US dollar, and climbed from 1.3042 on Monday to 1.3549 on Friday. But how long will the improvement last?
It’s always good to talk with other people if you are thinking about trading in the foreign exchange markets. One website that allows you to do just that is Forex Factory.
Available at http://www.forexfactory.com/, you can see that the forum is split into several sections. This makes it easy to find just the kind of information you need.
So here we are at the end of another less than encouraging report for the British pound. Let’s hope things take a turn for the better very soon. We’ll see you next time.