The Rise and Fall of the British Pound
Posted by Allison on 26 June 2012, 06:41
After an interesting week on the currency markets last week, would the pound perform well this week or fall behind the other main currencies? It’s time to see what the actual facts of the matter were.
An overview of the currency markets for June 18th – June 22nd 2012
Let’s begin with our usual pairing of the British pound and the US dollar. At the start of the week the pound was bringing in 1.5514 and this had an immediate jump to 1.5655 by Monday evening, so things started well. There was another small improvement on Tuesday and by the close of Wednesday the pound was up to 1.5761. Unfortunately that was as good as things would get. By the time the whole week was over, the pound was back to 1.5591. At least this was a little better than it had started the week on.
Let’s move on and see whether the pound could improve against the Euro now. The starting rate was 1.2316 and once again Monday proved to be a good day, with the pound reaching 1.2406. It mirrored the dollar on Tuesday too, edging up to 1.2419 in the process. But the drop here came on Thursday as it fell to 1.2392 and it edged up again on Friday to close the week on 1.2434.
Our third stop is the Hong Kong dollar. Our opening rate here was 12.038 and the exchange rate improved steadily over the first half of the week. By Wednesday it had reached 12.229 but this was the best rate we would have for the entire week. Friday closed out the week with a much lower 12.100 although as with the US dollar this was still better than we had seen at the start of the week.
Let’s move on and see whether the pound could do any better against the New Zealand dollar now. The starting point here was 1.9763 but could we edge closer to the two dollar mark? Monday saw the pound put on a little to rise higher, but it dropped back to 1.9689 on Tuesday. It rose to 1.9761 the next day before dropping back again on Thursday and eventually Friday saw a closing rate of 1.9769.
Finally we have just the Australian dollar to check out. The pound started on 1.5474 here and climbed to 1.5532 on Monday evening. It then dropped back to 1.5419 so there was clearly a lot of work to do if it was going to rise up again by the end of the week. The next couple of days didn’t look good but in actual fact the best was going to come last here. By Friday evening when the markets closed, the pound was on a much healthier 1.5530.
Notable events in the world of currency
British pound performs well against Canadian dollar
From a starting point of 1.5889 on Monday morning, the pound eventually finished the week in a better position on 1.6032.
Good news against the Swiss franc too
Here the exchange rate went up from 1.4792 to 1.4932 over the course of the week.
But a slight drop was on the cards against the Icelandic krona
Here the pound started the week on 195.987 but it finished slightly lower on 195.966.
We always go to one of the main currency news sites online to get a look at how the British pound has performed in recent days. Here is one of the latest stories from the Bloomberg site - which shows how quickly the pound can lose ground against other major currencies, due to the regular monthly meeting at the Bank of England on this occasion.
Perhaps next week the news will be better, although on balance this has not been a bad week. The first half was better than the latter half but things could have been very much worse. We will keep watching to see what happens next.