Posted by Allison on 6 October 2009, 10:51
The pound has been having a tough time against the Euro for some time now. Short term gains haven’t been around for very long, with the British pound struggling to maintain any kind of authority over the European single currency.
Quite frequently we see articles such as the one appearing on the Bloomberg site recently, which tell us all about the struggles of the pound in this arena. You can read one of the latest news articles at this link.
The last couple of weeks have been an up and down affair for the British pound on the currency converter. Back on the 1st September it was claiming 1.1344 Euros to the pound, and things actually looked rather rosy as that week went on. The following day it pushed things up to 1.1427, as the Euro itself struggled to find some power against the pound.
For the beginning of September at least though, the momentum was with the pound. On the 3rd of the month it bagged an exchange rate of 1.1432, and it followed that up with an even better 1.1467 the next day.
That finished off the first week of the month, and so far things were going well for the pound. But this is exactly the kind of situation that we often see. The pound gets a good run which lasts for a few days, and then it all crumbles away to nothing again as the Euro gets on a good run itself.
So what happened next? Did this pattern repeat itself into the second week of September?
Well at the end of the first day into that week the pound lost its grip a little and finished up on 1.1448 at the close of play. That slipped a little further to 1.1446 the following day, before sinking even lower still the day after. A figure of just 1.1372 was achieved on that Wednesday evening, after which the pound seemed to jolt back into action. Two more climbs back up again left the pound sitting on an exchange rate of 1.1442 going into the weekend.
So we can see here that the pound is always rocky against the Euro. It hasn’t had a really good run for a while now. And as the Bloomberg story indicates, speculation on news announcements by the Bank of England were the reason behind this latest ‘up and down’ affair.
Quite where the pound will go next against the European currency is anyone’s guess. It would be nice to think that a positive upward slant would be achieved now, but this seems a little too optimistic given the circumstances. We must just hope that the pound can at least hold its own, even if it can’t pull ahead by any great amount. It is wishful thinking to expect great things from the British pound just yet, and while that might seem very negative we must be realistic and accept that the pound has a long way to go before regaining the strength it had before the recession kicked off.
So it will be worth keeping an eye on those exchange rates as time goes on. This up and down pattern is very likely to continue, with neither currency managing to hold on to a distinct advantage for very long.