Posted by Allison on 15 May 2009, 13:54
This has always been a thorny subject – but never more so than recently it would seem.
If you have any knowledge of the currency markets and you are always tapping away on a currency converter to see how the pound is doing against other major currencies, then you will know it has had a rough time against the Euro. At one point it seemed to be on the verge of reaching parity – that is, the point where they are both essentially worth the same.
But while some Euro fans would have looked on this as a reason to try and join the single currency, many do not think the same way. Take this article from the BBC website for example. It is clear that the majority do not want to be a part of Europe as a whole. You can read more here.
But how has the pound been faring against the Euro of late, after that rough period where parity was close by?
If we go back to the 18th March, we can see that the pound was worth 1.0648 Euros. But since then things have indeed improved. On the 23rd of that month it climbed to 1.0759, and the following day it climbed even more to 1.0862. Of course there are always ups and downs and it was back down to 1.0734 a couple of days later.
But the notable date here is actually April Fool’s Day. The British pound made it back up to 1.0862 on that day – and most importantly of all it hasn’t slipped back into 1.07 territory ever since. Far from it in fact – it has actually managed to reach much better heights. The 2nd April alone saw it climb to 1.0954.
So is the pound over the worst? Or does this merely mean that it is the Euro’s turn to have a rough time? After all the recession does affect different countries in different ways, so we can all expect to have a hard time one way or another.
Whatever the case may be, another landmark was reached on 6th May, as the pound claimed an exchange rate of 1.1047. A while back we were panicking that the ‘one for one’ scenario was getting closer and closer, and yet now nothing could seem to be further from the truth. Can the pound keep up this performance and stake its claim as a strong currency of its own right once more?
As we went into May the exchange rate was 1.1193, but by the 4th it had climbed to 1.1239. What would be the highest point it could reach now?
Well the highest point so far has been 1.1303 on the 7th May. Although it has slipped slightly since – up to the time of writing – it shows no signs of returning to the 1.06 figure it was struggling to claim less than two months ago.
Many people do not want to see the pound swallowed up by the single currency. And it is true that if it were to go, we would never get it back. So this spirited and renewed performance is good news for us because we can point to it as being a sign of Britain’s renewed strength that will get us through this recession.