Posted by Allison on 28 May 2019, 13:10
Welcome to another week in the life of the currency markets. Would we see a big week this week, and if so, would it be in a good or bad way?
The pound opened the week on 1.2734 versus the American currency, but where would it go from there? The answer was down, although only to 1.2725 by Monday evening. Unfortunately, that early slide would turn into a prolonged one, taking the pound to 1.2653 over the next three days. This took us to Thursday evening, where we had just one day left to arrest this disappointing performance. We did manage to claw back some losses to finish on 1.2711 on Friday, but we could not quite manage to erase all those losses.
Over in Europe, the pound began on 1.1406 and took a similar route against the euro to the one it had taken against the US dollar. This time it dipped to 1.1396 on day one. It then continued the same trend of dipping a little each day. Those dips added up to a loss that took the pound to 1.1315 by Thursday evening. Once again, though, we managed to improve that on Friday night, recovering by some margin at least, finishing on 1.1345 by the end of trading.
Our third stop takes us to the Hong Kong dollar and our position against this currency. The first day of trading saw the pound start on 1.1406 before falling to 1.1396 by the end of the day. And once again, the same pattern we have already seen twice over was in evidence again here. That meant Thursday was the low point on 1.1315, before the pound perked up slightly to finish the week on 1.1345.
The pound was worth 1.9493 against the New Zealand dollar this time around. It dipped against the currency on Monday, as we thought it would, falling to 1.9477 as it did so. However, from there the pattern changed slightly as the pound rose to finish Tuesday on 1.9535. Unfortunately, while that seemed to bode well, the pound could not match that performance for the remainder of the week. Instead, it dipped to close out Friday night on a disappointing 1.9401.
Our final stop reveals the opening rate against the Australian dollar was 1.8450. This experienced a fall to 1.8425 by Monday evening, before improving to 1.8459 the following day – much as it had against the Kiwi dollar. However, we know how things panned out there, and the pattern was followed once again here. By Friday night, we were looking at a lower rate of 1.8352.
The pound could have done worse here, although it still dropped from 1.7124 to 1.7076 over the course of the week.
The pound was not having a great week, as seen by the drop from 1.2870 to 1.2737 against the Swiss franc.
Good results were hard to come by last week, but they were there to be seen if you looked hard enough. We found one in the shape of the pound versus the krona, where the pound began on 156.465 before rising to 157.137 on Friday night.
No doubt the uncertainty over the Prime Minister’s position led to the rough ride the pound had over the early days of the week on the currency markets. Perhaps news of Theresa May’s resignation on Friday led to the improvement in the pound’s position. However, more uncertainty lies ahead, and we must now wait and see what happens next. Will we see good or bad news for the British pound in the weeks ahead? The results are yet to be known, so we will be watching closely to see what happens each day.