Posted by Allison on 23 July 2018, 14:21
Welcome to the latest snapshot of the currency markets, featuring the British pound and its position with various other notable currencies. Would it come out on top this week?
The British pound began trading Monday morning on 1.3157, before rising to 1.3277 by the close of play. That was a great start to the week, but it didn’t necessarily mean things would continue the same way. Indeed, the next three days were not good for the pound. Instead of rising further, it dipped to a low of 1.2976 by Thursday night. A reasonable recovery to 1.3047 by the close of play on Friday recouped some – but not all – of the week’s losses.
Would something similar happen against the euro? We did see an early rise here too as the British pound started trading on 1.1300 before reaching 1.1328 on Monday evening. Nowhere near the rise we’d seen against the US dollar, but it did follow the pattern set there over the next three days. It dropped to 1.1198 come Thursday evening, but sadly the bad news was not yet over. Instead, it dipped further to close on 1.1180 on Friday night.
Over to Hong Kong now, and the pound had a similarly good opening here. It started the week on 10.327 before moving to 10.421 at the end of the day. Unfortunately, it was following the pattern set against the US dollar. That meant three poor days to follow and then a better day to finish. Thursday’s closing exchange rate took the pound to 10.186 before rising once more to finish on 10.240 on Friday. So, yet again, we had a loss here.
We should expect a drop against the New Zealand dollar this week as well, and indeed we did see one. The pound began trading on 1.9528 and experienced a mild rise on Monday, closing out on 1.9555. A significant dip to 1.9375 occurred the day after though. The pattern was broken in that the pound fell to 1.9272 on Wednesday before rising to 1.9293 on Thursday, but after that it was back to more disappointment. We fell to close on 1.9286 on Friday night – quite a loss over the whole week.
It was doubtful the pound could achieve anything better against the Australian dollar, and so it proved. The opening rate of 1.7814 perked up to 1.7869 on day one, but from then on there was no good news to be seen anywhere. Instead, the pound finished on 1.7684, marking the end to a troublesome week wherever you looked.
This was predictable by now, but it was still sobering to see the results in front of us. We ended up with a loss of nearly a cent as we went from 1.7356 to 1.7265 this time around.
Yes, the pattern was repeated here as well, as the pound opened the week on 1.3226. A rise to 1.3250 on day one wasn’t enough to sustain the pound, as it fell steadily throughout the remainder of the week. It only stalled on 1.3005 when the markets closed on Friday night.
The news didn’t get any better here for the British pound. It began trading on 141.488 before dipping on all but Monday, to reach a closing rate of 138.632 on Friday night.
We suspect the uncertainty over the Brexit negotiations is to blame for the uncertainty over the British pound on the currency markets. The sooner that is resolved, the stronger the pound is likely to be. At least it would mean we know which direction it might be heading in.
Until then, we should perhaps expect this pattern to continue. It remains unlikely the pound will perk up anytime soon. Rest assured we shall be reporting on the latest events as they happen.