A Troublesome Week for the British Pound

Posted by Allison on 8 February 2017, 13:58

We’ve already prepared you for the news that the British pound did not do well on the markets this week. How badly did it do?

An overview of the currency markets for January 30th – February 3rd 2017

We soon realised we were in for a tough week against the US dollar. A starting rate of 1.2540 soon gave way to two poor days, which took the British pound down to 1.2490 by Tuesday evening. Wednesday was better, seeing the pound climb to 1.2632, so this was a significant jump from the previous day. However, we then had two more poorly-performing days for the pound, and this meant the final rate for the week was far lower than we’d expected. The pound finished on 1.2487 and recorded a loss for the entire week.

So, where did this leave us against the euro? Well, we began in better shape, starting on 1.1741 and rising to 1.1773 by Monday evening. However, things then took a turn for the worse on Tuesday, taking us back to 1.1613. We soon realised we were in for an up-and-down affair here too this week, with a rise soon followed by a fall and vice versa. This played out for the entire week, and eventually we closed on 1.1626 on Friday night. Again, this represented a loss for the week.

Our third stop is with the Hong Kong dollar, to see whether we could do any better here. The opening exchange rate for the pound was 9.7303, but this soon dropped to 9.7104 by the time Monday was over. The same pattern played out on Tuesday too, sending the pound lower to 9.6900. A huge leap to 9.8012 was seen on Wednesday, but as we noted with the US dollar, we then had two poor days to finish the week. This meant the pound finished on a disappointing 9.6895.

Our fourth stop takes in the New Zealand dollar. Although the pound usually sees a similar experience with different dollar currencies, this doesn’t always apply in this part of the world. So, we began on 1.7290 before dropping over the first two days to reach a low of 1.7082 on Tuesday evening. So far, we’d followed the pattern seen elsewhere. We then rose to 1.7346 on Wednesday, so things were looking better. Mind you, we’d seen this happen elsewhere too. With a drop to 1.7152 on Thursday, we were prepared for the same again to close out the week. However, we did manage to buck the trend and close on 1.7184 here, although this still meant we’d lost out across the entire week.

Finally, we must see whether the pound did any better against the Australian dollar. Here, we opened on 1.6636 before having that same two-day drop we were now coming to expect. This took us back to 1.6489 on Tuesday, before the Wednesday rise kicked in, taking us to a closing rate of 1.6653. We lost ground again the day after, but managed to recover a little ground by Friday evening, finishing on 1.6342 (which still meant we’d suffered a significant loss).

Notable events in the world of currency

More losses against the Canadian dollar

We fell from 1.6451 to 1.6303 against the Canadian dollar last week, so there was no good news to report here either.

More of the same against the Swiss franc?

Yes, indeed, as the pound began trading on 1.2550 and fell to 1.2434 to finish the week.

Another steep drop against the Icelandic krona

Here, too, the pound did badly last week. It fell from 145.888 to 141.598 over the course of the week.

So, we have nothing good to report to you this week. Whether this pattern will continue remains to be seen. We shall keep a close eye on things this week to determine whether the pattern will set in for longer, or whether the pound can recover more quickly. We suspect the latter may be difficult to achieve.