Posted by Allison on 26 June 2016, 07:55
It doesn’t take a currency expert to realise the British pound is finding it tough on the currency markets at the moment. But how long will this last? Let’s see how it would do this week.
Let’s begin with the pound against the US dollar, where the exchange rate to start off with was 1.4403. There was a significant drop on day one as the pound fell to 1.4170, which made us wonder if there was any chance at all of recovery by the end of the week. This concern was made all the more relevant with another drop on Tuesday, this time to 1.4123. While we made a slight recovery on Wednesday, it was nothing to really celebrate, and with another drop the day after, it was clear this week would not go our way. It ended with the British pound hitting 1.4287 to at least pull back some of the losses on Friday night.
We were half-expecting some more losses against the euro too, in view of the upcoming referendum, and that’s exactly the way things went. However, it wasn’t all as simple as that. We began trading on 1.2742 with the same large drop on day one that we’d seen against the euro. This took us to 1.2576, but after that point the tide did turn in our favour. Indeed, it remained that way for the rest of the week, as the pound gradually managed to recoup some of the losses. We didn’t get them all back, but we did make it back to 1.2695 by Friday night.
Things would prove unpredictable against the Hong Kong dollar as well this week. We ended up dropping to 11.000 from the starting rate of 11.179 on Monday, and a second drop on Tuesday led us to 10.960 that day. From then on, an up-and-down affair meant we were unsure where things would end up. However, Friday night saw the pound finish on 11.087 against the Hong Kong dollar.
The same uncertain pattern was in evidence once again elsewhere in the world, as the British pound tried to increase its standing against the New Zealand dollar. However, while the extreme ups and downs we sometimes see here were nowhere to be seen this week, we did still drop from 2.0323 on Monday morning to 2.0260 by Friday night. It could have been far worse than that.
Finally, we have the Australian dollar to look at – and once again, things did not bode well at the beginning of the week. We started on 1.9462 before the pound dropped to 1.9151 that night. After some toing and froing throughout the remainder of the week, the pound did manage to claw back some losses and end up on 1.9339 as a result.
Here we actually managed to do well, rising from 1.8361 to 1.8432 this week.
The news was not as good here, although the loss was smaller than it had seen against the other currencies in Europe. We managed to drop from 1.3869 to 1.3733 in all.
We would not end the week on a promising note here, either. The British pound started trading on 177.121 and ended up finishing on 176.199.
As we can see, it was a rough week for the pound, but really, no rougher than we have seen in past weeks. In truth, the picture could be very different next week, as we see what the markets have to say on Friday morning – the 24th June – which is the day after the referendum takes place. That will be worth watching for, whatever the result happens to be. If the pound is due to change drastically at that time, you can be sure we will have all the results stemming from that event to bring you here.