Posted by Allison on 23 November 2009, 15:16
Another week has passed us by and it’s time once again to sit down and evaluate how the British pound performed on the currency markets last week. Previously we saw the pound doing well against three out of the five major currencies we take a look at each time. It did well until it reached New Zealand and Australia, where it let itself down badly.
So what kind of position are we starting from this time as we look at the results on the currency converter for the previous week? Well, we finished up by nearly a cent against the US dollar and just over half a Euro cent against the European single currency. We also did well against the Hong Kong dollar, as we managed to add on a total of 0.074 there.
But when it came to the Kiwi and Aussie dollars, they certainly had the better result. We dropped around three cents against the New Zealand dollar and the Australian dollar got the better of us by nearly a cent and a half. Would this be a pattern that would continue for this coming week as well, or would we be able to turn things around to some extent?
Needless to say we are about to find out exactly what did happen, as we go through the events of the currency markets for last week. Was it a good one for the pound or a bad one? Will we be looking at a whitewash of bad exchange rates or could the pound keep on performing well against the US dollar and the Euro in particular?
Enough speculation now – let’s see what really did happen shall we?
If you remember from last time, we were looking to see if the British pound could achieve something in the region of a $1.66 exchange rate against the US dollar by the end of the week. And this it did, as it managed to snag a rate of 1.6682 at the close of play on Friday evening.
But where would we end up just one week later? Could we press for an exchange rate of $1.67 since we were so close to it for starters?
Let’s find out. We certainly started well and we actually achieved our goal at the end of day one. By that stage we had successfully bagged an exchange rate of 1.6723. But was it too soon? Could we hang onto that exchange rate for the rest of the week or was it going to be too much to cope with?
If Tuesday’s results were anything to go by the pound was on something of a roll here. It clearly showed more strength as the day went by, and the US dollar seemed hard put to try and do anything about it. That resulted in a closing rate of 1.6784 by the time all was said and done that day.
So far then we had added just over a cent onto the exchange rate since the end of the previous week. But with three full days still to go there was every chance that it would all be too much too soon. It seemed hard to believe that the British pound could keep on successfully adding more and more to make the week even more impressive.
But Wednesday seemed to fly in the face of that caution, as the pound managed to up things to the next level and achieve an exchange rate of 1.6815 by the end of the day. It was strange that just one week ago we were hoping to reach the heady heights of $1.66, and here we were now with a figure of more than $1.68.
That caution and doubt proved to be right however. As Thursday got underway the tide started to turn against the British pound and the closing rate as a result was a much lower 1.6628. Suddenly we had gone from an impressive $1.68 the previous day to a rate that was lower than the one we had started with. We had just Friday to go now too, so what would happen in the remaining twenty four hours that were open to us? Could we pull a last minute improvement out of the bag to make up for a dire Thursday in which we had undone all the good work we’d already achieved?
Unfortunately the answer would be good for the US but not good for the UK. And not only did we not manage to improve things, we actually made them a lot worse. The closing exchange rate for the week proved to be a dismal 1.6476. The total losses then were just over two cents, making this a poor week all in all for the pound.
So with that result against the US dollar giving us something to think about, what could we achieve against the Euro? Were we in for a bad result here too?
Our starting point here was 1.1220, after adding on just over half a cent since the previous week. But the pattern we had followed against the US dollar would not be repeated here – at least not to begin with. Right from the start we had a loss to contend with as Monday night recorded an exchange rate of 1.1175 at the close of trading.
That wasn’t a huge loss by any means, but it did call into question the ability of the pound to have a good week here. Tuesday was better though as the pound brushed itself off and stormed back to finish on 1.1283 at the close of play. The only question now was whether that would prove to be a happy blip in the scheme of things, or whether we could keep this performance up.
Wednesday didn’t really give us a definite answer as the closing rate was recorded as 1.1242. And with just two days to go until the end of the week it was really anyone’s idea as to which currency would come out on top.
Unfortunately Thursday began to show signs of weakness as far as the British pound was concerned. By the close of play the Euro had asserted its authority and pushed the pound back down to 1.1187. This was clearly slightly lower than the point the pound had started from, and with a single day’s trading left to go until the weekend, which one would win out in the end?
The answer was – unfortunately for us – the Euro. The pound limped home on 1.1121 in the end, meaning that we had lost out on almost exactly one Euro cent since the week began. Perhaps we can hope for better next time.
Let’s move on to Hong Kong now to see if we managed to build on the success we’d had there last time. We were starting off with a healthy 12.928 to work with, so what would we be able to do with that?
The first day did give us a healthy start, as we finished off with a rate of 12.960 in the bag. But we have seen a good start like this already this week, and as we now know there is no guarantee that it will lead to a good finish as well.
We could still celebrate on Tuesday though because we went over a significant barrier. By the time the day was over we were bagging a total of 13.007 Hong Kong dollars to the pound, making us wonder whether this would actually be an excellent week all in all.
We were only just over the 13.000 barrier on that day but we managed to improve on it slightly the following day as well. Wednesday evening saw an exchange rate of 13.031.
But unfortunately for us that would turn out to be the peak of our good results against the Hong Kong dollar this time around. By Thursday evening we had dipped back below the 13.000 mark and were left with a rate of 12.886. And as you may have expected, this didn’t get any better on Friday evening either. The final rate for the week was 12.769, meaning we had lost out on a total of 0.159 over the week as a whole. This was more than double what we had added on the previous week, so we were ready for better results next time, that’s for sure.
Moving on to our next stop we find ourselves up against the New Zealand dollar. Last week’s three cent loss left us on 2.2633 at the close of play on Friday night, so we were looking to make back some of that if at all possible.
Well we didn’t start well because by the end of Monday the pound was down to 2.2464. There was a slight improvement the following day though as we managed to improve our position slightly to finish on 2.2499. But once again that didn’t last and Wednesday evening saw an exchange rate that was down to 2.2438.
So with just two days to go could we turn things around and end up with a much better outcome all in all?
If we had thought about a good result we would have come up with a figure like 2.2782 for Thursday. And that is exactly what we got; something of a surprise but a very pleasant one nonetheless. And on Friday night it got better still, as the pound finished off a surprising week against the New Zealand dollar with a rate of 2.2832 in the bag. That meant we had successfully added on 0.0199 – very nearly two cents.
But could we replicate that success in Australia or would the Aussie dollar have something up its sleeve to hit us with?
The starting point here was 1.7973 after a loss of nearly a cent and a half the previous week. If we could improve on that this time around we would certainly be delighted with that.
We had a similar start to the week in Australia as we had seen in New Zealand. The closing figure on Monday evening was 1.7884. The next day saw a big leap in our favour though as the exchange rate shot up to 1.8079. Did this mean we would see a good result in Australia to finish off this week’s report?
Tuesday is perhaps a little early to be celebrating as there are still three days of results left to go. And indeed Wednesday saw a very slight decrease in the exchange rate, but only down to 1.8016. It wasn’t enough to get us worrying just yet.
So what happened in the remaining two days of the week?
The good news is that both days were kind to us. Thursday saw a closing rate of 1.8116 and it got even better on Friday as we finished on 1.8127. That meant we had seen a successful week here and added on a total of 0.0154.
So all in all it wasn’t a bad week last week. But can we improve on it next time?
The US dollar improved from 0.6682 on Monday night to a finishing rate of 0.6749 on Friday night. Not even a whole cent, but better than nothing.
From 0.02328 on Monday night to 0.02321 just four days later, there wasn’t a lot to choose between these two currencies last week. However the Euro was slightly better off come the end of the week.
The Aussie dollar closed at 1.2560 on Monday night and dipped to a low of 1.2444 before regaining its strength to finish the week on 1.2595.
The British pound had a tumultuous week last week, as it was reported on the Reuters website. You can read about the woes of the pound – and the good news for the Euro – by going to the Reuters website.
So there we are for another week. It wasn’t the worst ever week for the pound, despite what the news stories reported. It could have been better but let’s hope for better results next time. We will see you next week as always.