Posted by Allison on 27 October 2009, 17:14
Here we are with another week gone by and another five days worth of data to sort through with regard to the currency markets. Before last week’s performance it seemed as if we were always reporting on bad news. But last week we actually achieved five excellent results out of five, which went some way towards proving that the pound was finally dragging itself out of the doldrums.
The question is of course, was it a one time thing or would we see more of the same this week?
It’s well worth having your currency converter to hand if you want to check the progress of the pound in future weeks. We’ll be reporting on the latest figures in just a few moments, but we should also be looking ahead to see if it will start to creep up on the Euro and the US dollar in particular. Things have been hard for the British pound of late, and we’d certainly like to see an improvement on those results that lasts longer than a few days.
And on top of this we have lost a lot of ground against both the Australian and New Zealand dollars in recent weeks too. We’ve got a lot of cents to make up on both of those currencies, and what better time to do it than now? Just imagine if we could actually finish the year on a much stronger note than we started.
While a weaker pound will benefit some in the UK, it does not bode well in many other ways. But which way did it go last week? Let’s find out right now as we look back on the currency exchange rates that we started and ended with.
We finally had a great week against the US dollar last time around, with the UK pound managing to add on over three cents over the week as a whole. That left us on 1.6308 at the week’s end, so what could we do with that this time?
Well we started off with a marginal improvement on that on the Monday, because by the end of the day we had advanced to 1.6316. But could we do better? Could we improve still further and make it two great weeks in a row?
Tuesday certainly seemed to be looking good, as the exchange rate headed up slightly more and left us on 1.6420 by the close of play. That meant we were over a cent up on the week so far – something to celebrate there, but also something to try and hang onto.
And once again Wednesday was to turn out well for us. The pound showed its strength throughout the day as the exchange rate swung in our direction. This left us with a figure of 1.6577 against the US dollar by the time the day was out. Once again we were heading in the right direction, but would we keep on going there throughout the next two days, or was there something else in store?
Thursday did see things dip a little, leaving the pound on 1.6569 at the day’s end. That was only a marginal dip but we would have preferred not to see it at all. The question now was whether that small dip was setting up an even bigger dip on the following day, or whether it was a minute blip in what was otherwise turning out to be a good week.
Unfortunately for us the answer turned out to be the former one. On Friday, as everyone finished for the day and the markets closed for the weekend, the pound slid back and landed hard on 1.6375 at the close of play. So we had lost out on nearly two cents overnight – but did that mean we had seen a bad week overall?
In actual fact we had managed to end up in a better position than we had the week before. The increase was a small one though, leaving us only slightly higher by 0.0067 of a cent. Still it wasn’t a loss, so that was at least a good sign.
So with one good result so far – at least it wasn’t a loss, despite that huge drop at the last minute – let’s move on to see how the pound did against the European single currency. This has been an interesting one to watch of late, because the two currencies aren’t that far apart from each other now. The pound used to be some distance away from the Euro, but parity has never been that far away in recent months.
So where are we starting from this time? The previous week saw the pound finishing by claiming 1.0967 against the Euro, having added on over a cent during that week. Could we do the same or better this time?
As it turned out the first blood of the week went to the Euro. It was a small difference though, as the pound dropped ever so slightly to 1.0937. And with four days to go there was a long way to go yet before the Euro could claim a successful week against the British pound. It could easily go the other way too.
And indeed day two saw the British pound grabbing back what it had lost the day before. By the close of play the pound was on an exchange rate of 1.0968 – just a fraction above its starting point on Monday morning.
So we were back to square one effectively, and we had already reached the midweek point. This was clearly going to be the time for the British pound to claim a midweek victory though, because by the end of the day the currency had zoomed up to 1.1109. That was quite a jump in a single day, adding on nearly a cent and a half overnight.
The balance of power shifted once again the next day though, as the Euro came back and knocked the pound down to size once more. It had pushed the exchange rate back down to 1.1046 by the time the day was out, and so there was clearly still some more work to be done.
And the final result went to the Euro as well, as the British pound found that it couldn’t quite carry on exhibiting the strength it had displayed earlier in the week. The final exchange rate as the week came to a close was 1.0902. That meant the British pound had lost out against the Euro over the week as a whole, dropping a little over half a cent in total.
So we have one good and one not so good result thus far. Next up it is the turn of the Hong Kong dollar to go head to head against the British pound. So who came off with the best result from that one?
We added on 0.251 last time, leaving us sitting on a healthy 12.638 exchange rate against the Hong Kong dollar. And once again the week got off to a great start, with a rate of 12.645 being recorded by the end of the day. It wasn’t a huge amount but it was better than nothing, and it gave us hope that we could have another reasonably good week.
Tuesday looked better still as the pound pushed further to claim an exchange rate of 12.726. Did this open the door to even better rates later in the week, or would we see a sudden drop as we had against the other currencies we have looked at thus far?
Wednesday certainly panned out to be another good day, with the pound reaching a new high of 12.847 by the time the day was out. That left two days to go – days which so far have not been particularly good against the other two currencies. Would the same happen here too?
We did see a marginal dip on Thursday as the exchange rate fell back to 12.841, but it wasn’t enough to cause undue concern. However the exchange rate we ended up with on Friday was a different story. By that time the pound could only muster up 12.691 Hong Kong dollars. Luckily for us although we had dropped considerably overnight we were still 0.053 up on the week as a whole, so we had done enough hard work to warrant a good result all in all.
We grabbed back four cents against the New Zealand dollar last time, leaving us on 2.2087 as the week ended. But when we finished up with an exchange rate of 2.1875 on Monday night, it seemed that we weren’t going to be following the pattern we had experienced against other currencies.
This seemed to be confirmed on Tuesday when the exchange rate fell a little further to 2.1756. Was this going to be one long slippery slope to the end of the week for the pound?
As it turned out we weren’t seeing that type of slope at all. On Wednesday we saw something very different as the pound started to fight back and claimed a total of 2.2066 Hong Kong dollars by the end of the day. Could we now keep going in the right direction for the remaining two days?
It didn’t look like the answer was going to be one that we liked. By the close of play on Thursday we were left with a rate of 2.1950, but there was even worse news in store as we finished off the week as a whole. That was when the exchange rate had gone down to 2.1665 – meaning that we had lost the four cents we had gained the previous week. It wasn’t a good week in New Zealand for the British pound.
So with a mixed bag of results so far, it’s time for our final stop – this time in Australia. We had gained a little over a cent here last week, leaving us on 1.7782 at the end of the week. Could we do better or worse this time?
Monday saw the first good result going to Australia, with a rate of 1.7725 at the end of the day. And on Tuesday evening that had been improved even more as far as they were concerned, with the pound managing to claim just 1.7682.
But the pound came storming back the following day and by the time the markets closed we were sitting at 1.7970. Now that was a good day’s work – but with two days still to go there was clearly still some work to be done if we wanted to hang on to that result.
We couldn’t quite maintain that on the next day as the pound slipped back slightly to end up on 1.7933. And by the time Friday was over and done with the final exchange rate of the week was recorded as 1.7700 exactly. That meant we had lost out on 0.0082 all in all.
So it wasn’t as good as the previous week, but the pound did still manage a few good results in there.
It was a case of ‘blink and you’ll miss it’, but the Euro did manage to move from 1.6206 to 1.6235 last week against the Aussie dollar.
It was standing at 0.1309 on Monday night, but by Friday the Hong Kong dollar had fallen to 0.1299 against the Swiss franc.
From 6.8267 on Monday evening to 6.8284 on Friday night, the US dollar was inching its way forward against the Chinese currency last week.
At the tail end of the week there was a news story on Bloomberg which pointed to the possibility of the Philippines borrowing from an unlikely source. Read more about this currency related story here.
So there we have it for another week. We’ll be back next week in the hope that we can report on five great results for the British pound once again, instead of just a couple. We’ll see you then.