Would Pride Be Followed By a Fall on the Currency Markets?
Posted by Allison on 8 October 2014, 12:49
Welcome back to another report, which reveals all you need to know about the most recent week of trading on the currency markets. How well would the British pound do?
An overview of the currency markets for September 29th – October 3rd 2014
Let’s see how the British pound would do this week after such a good week last week. Unfortunately things did not bode well when we looked at its performance against the US dollar. We opened on 1.6308 but on day one we ended up closing on 1.6227, significantly lower. The only rise we saw at all this week was on Wednesday and it was not a large one. After that we dropped more and by Friday evening the British pound stood at 1.6066 against the dollar. This was a huge disappointment.
Over to the euro now and here the pound began the week on 1.2809 before dropping to 1.2776 by Monday evening. It looked just as disappointing as it had against the US dollar, and indeed we only saw one day that delivered a positive result. Every other day saw decreases in the value of the pound. This meant that by Friday evening the pound stalled on 1.2734. At least these losses were not as large.
Now we have the Hong Kong dollar to consider, and perhaps we were ready for a less promising picture. This was just as well because there was no good news to share here this week. We started with an exchange rate of 12.651 and this gradually decreased throughout the week. The losses each day were not great but they were still heading in the wrong direction. By the close of play on Friday we were down to 12.467.
We began on 2.0635 against the New Zealand dollar after massive rises last week. Perhaps then an improvement to 2.0890 on Monday was a surprise. It certainly was, but the rest of the week was all downhill. By the time the week was over the pound had finished on 2.0444 so at least the losses were not as bad as perhaps they could have been in this particular area.
Very often a loss against the New Zealand dollar means we can reasonably expect a similar result against the Australian dollar. Unfortunately we hate to be right on this occasion but indeed we are. The pound began on 1.8551 on Monday morning before improving to 1.8595 by the evening. We then had a fall the next day followed by a better picture on Wednesday. However the pound couldn’t sustain the highs and it finished on 1.8357 by Friday night.
Notable events in the world of currency
Another fall against the Canadian dollar
The pound couldn’t catch any good results this week. Here we started off with a rate of 1.8122 and lost it to a much lower rate of 1.7966 by Friday evening.
A smaller rate of attrition against the Swiss franc
Here too there was bad news, but it seemed to be a little less severe than perhaps we might have thought. The pound dropped from 1.5461 on Monday morning to 1.5395 by the evening.
More bad news against the Icelandic krona
Here the pound was in another bad situation, with nowhere to go but down. It began on 195.821 before falling back to 194.613 by Friday evening.
There have been worse weeks on the currency markets than this one. However it was perhaps the great success of the pound last week that made this week’s results so disappointing to view. We should perhaps have realised something like this could happen, but even with that knowledge present in our minds it doesn’t make the experience any less disappointing.
We can but hope that next week will be much improved for the pound, or at least that the losses can be stemmed as the pound recovers its balance. We shall have to wait and see what the markets deliver but there is every chance we might have better news.