Posted by Allison on 16 January 2017, 17:19
It’s time once again to see whether the British pound would have a good week or a bad one. As it turned out, it didn’t take long to decide which way things were going to go.
Here we go then, and with an opening rate of 1.2363 against the US dollar, we were hoping for an encouraging start from the British pound. We didn’t get it, though, as it dropped to 1.2134 on Monday night. While it perked up to 1.2154 on Tuesday, it was back to 1.2110 the following day. Even though it improved significantly on Thursday, rising to 1.2296 in the process, it never regained the level it started the week on. Instead, it dropped to 1.2177.
Time to go over to the euro now, where the opening rate for the pound was 1.1675. We won’t keep you in suspense here, because a poor performance against the dollar unfortunately led to something similar against the euro too. We had just one day where we improved on the day before, with the remaining four seeing poor results all the way. So, the opening rate of 1.1675 turned into a closing rate for the week of 1.1422 – not a good performance at all.
Would there be anything different to report against the Hong Kong dollar? There were a couple of days where we did better than the day before, but three days that saw poor performances were all that was needed to drag us down. The overall picture was not a good one, as we were now coming to expect due to the results we had already seen elsewhere. While we began on 9.5881 this week, the Hong Kong dollar got the better of us and we finished on 9.4430.
By this point, we were almost expecting another poor result against the New Zealand dollar as well. However, we often see different results here to the one seen against the US dollar. This would not be true of this week, though. We began trading on 1.7598 before falling back throughout most of the week, with just one better day on Tuesday. This meant that by the time Friday arrived, the pound was far lower on 1.7078.
Finally, we have the Australian dollar to look at, but we were fully expecting a bad result here too. What were the odds we would get anything but, given what we have seen elsewhere already? We started on 1.6851 and here we didn’t see a positive result all week. This meant we had slid back to a disappointing 1.6248 this week.
We ended up losing ground here as well, just as we expected to. The pound traded on 1.6391 to open the week, before dropping back to 1.6002.
The by-now familiar pattern was seen again in this part of Europe. The pound opened on 1.2522 before dropping to 1.2253.
Here too we had some bad news as the pound fell from 140.484 to reach a low of 138.858 on Friday evening.
So, with lots of potential this week, the pound failed to fulfil it. We were hoping for a more encouraging start to the New Year than this, but the British pound is unable to deliver anything of note to celebrate – at least not this week.
With the reality of Article 50 to trigger Brexit looming, it is perhaps to be expected that the pound struggles now. But since this won’t happen until March, it does make us wonder how much lower the pound might go before it reaches rock bottom. Only time will provide us with the answer to that one, although we will be watching closely to see what happens next. We will provide you with the latest updates as and when we have them.