Posted by Allison on 7 January 2019, 17:32
Welcome to our last pre-Christmas report on the state of the currency markets. What would trading bring us this week – and would it be good news or bad?
As Christmas draws closer, we go into the final full week of trading for 2018. The British pound began the week on 1.2605 and had two encouraging days to start with. This sent it to 1.2641 by Tuesday night. We then dipped to 1.2614 by the following day’s end, bringing into question how promising the entire week would turn out to be. However, we need not have worried. The final two days took the pound back into more promising territory, allowing it to end the week on a rate of 1.2635. The question now was whether it could end the year on such a promising note.
Moving over to Europe, we can now see whether the pound had what it took to go up against the euro. Opening on 1.1152 here, we were soon aware the week would be far more uncertain here. We dropped to 1.1114 on day one, before regaining at least some of the losses by increasing to 1.1123 the following day. However, two more losses were to follow, making Friday a vital day in the pound’s journey towards snagging some more promising territory. As it turned out, the pound only recovered to 1.1116, so it finished lower against the euro than it had started out this week.
Our starting point against the Hong Kong dollar was 9.8483, which was soon left before after two strong days of trading to begin with. This meant the pound was sitting promisingly on 9.8849 by Tuesday night. Indeed, while it fell the following day, it had already risen high enough to absorb those losses. Another rise on Thursday took it to 9.9108, meaning that it still finished in a stronger position on Friday, even though it dropped back to 9.8974 in total.
New Zealand is our fourth stop, giving us an opening rate of 1.8545 and the hope the pound could do well here too. It didn’t have the best start, dropping over two days to reach 1.8455 by Tuesday evening. However, Wednesday was more promising, taking us to 1.8634 and the highest rate of the week thus far. Better yet was the fact we had two more days of good news to come. By Friday night, the pound had soared to 1.8832 – clearly the best rate of the week all told.
Could we replicate that result against the Australian dollar as well? We opened trading here on an exchange rate of 1.7566, and once again the first two days set the tone we were to follow. Tuesday ended with the pound reaching 1.7590, while the following day took us higher still to 1.7737. If we thought that might be the best we could hope for, we were wrong. Instead, the rest of the week continued in fine style for the British pound. It meant we ended trading for the week on an impressive 1.7959.
The pound did well to climb from 1.6871 to 1.7183 over the whole week here, giving us yet more good news to hold onto.
There was good news here too, although the rise was far more conservative than we’d seen against the Canadian dollar. The pound improved from 1.2564 to 1.2580 against the Swiss currency.
It wasn’t good news in all quarters, as the pound dipped from 155.483 to 148.064 this week.
So, with mostly good result punctuated with a few disappointing ones, we can take heart that this was a largely positive week. Will that trend continue? We doubt it will, given the political uncertainty in the UK at present. Only time will tell what will happen next.