Tough Times for the British Currency
Posted by Allison on 19 September 2016, 13:39
Can losses ever become predictable on the currency markets? We’ll let you make up your own mind as you explore the markets this week.
An overview of the currency markets for September 12th – September 16th 2016
Our first stop is the usual one – the British pound against the US dollar. Here we began trading on 1.3325 on Monday morning, with the hope we might improve on that position. Early hopes were soon dashed though, as the pound dropped in value over not just one or two days, but three. This meant the British currency stalled on 1.3185 on Wednesday night. Could it regain any ground before Friday night rolled around? It did better on Thursday, rising to close on 1.3209 but it was not enough to prevent another drop on Friday – this time to 1.3175.
So with that disappointment at the forefront of our minds, it is time to consider whether the pound would perform in much the same manner against the euro as well. Here, we started out on 1.1826 before rising slightly to close day one on 1.1837. Unfortunately, the remainder of the week went in just one direction – and it did not favour the pound. Instead, the British currency dropped steadily throughout the rest of the week, falling to an eventual low of 1.1736 on Friday evening.
Third on our list of stops is the Hong Kong dollar. Here, the pound began trading on 10.335 but again the week did not start in good fashion. Instead, the pound had three poor days to begin with. This sent the British pound down to 10.230 by Wednesday evening. It was becoming clear this was not the best week for the currency. While it did improve slightly on Thursday (to 10.248) it didn’t last, dropping back once more to 10.222 by the time trading ended on Friday evening.
We were hopeful of better news against the New Zealand dollar, but here too the news was not good. It looked a little better initially as the pound rose from 1.8092 to 1.8171 on day one. However, it then fell back to 1.8111 again the following day. After that, another rise to 1.8148 occurred midweek – after which it was all downhill. This led to the disappointment of dropping right back to 1.8035 by Friday night – although at least this was quite a minor loss overall compared to what we had seen in some other quarters.
Finally, let’s see whether the pound could do anything more promising against the Australian dollar. The opening rate here was 1.7545 and Monday at least went well, rising to 1.7673. But once again, Tuesday saw a loss for the pound that sent it back to 1.7623. Better news on Wednesday saw a rate of 1.7656 reached, but this would turn out to be as good as we would get from that point on. By the time the markets closed for the weekend, the British pound had stalled on 1.7545 – the exact rate it had started on.
Notable events in the world of currency
Better news against the Canadian dollar at least
We did manage to scrape out a bit of good news here at least, as the pound rose from 1.7266 to 1.7390 this week.
Freefall against the Swiss franc
This was a real disappointment, as the British pound sank from 1.2972 all the way to 1.2841 across the entire week.
More of the same was seen against the Icelandic krona as well
Here we saw the pound fall on all but one of the five days, dropping overall from 152.831 to 151.493 this week.
So we saw some hard losses this week, and somehow none of it seems surprising. Perhaps we can hope for better, but as this week shows, hoping is a long way from actually seeing it happen. We are more likely to expect more losses at the moment, with perhaps the odd rise thrown in at some point. Next week, we’ll see if that pattern bears itself out once again.