Strong Performances This Week for the British Currency

Posted by Allison on 7 November 2016, 16:00

Sometimes we have a week that takes us by surprise. This week would be such a week. We shall press on and reveal what happened so you can see how things played out.

An overview of the currency markets for October 31st – November 4th 2016

As the week got underway, the British pound was worth 1.2148 against the US dollar. However, we did get a reasonable start this time around, as it improved to 1.2155 by Monday evening. Tuesday brought better news as well, taking the pound to 1.2226 in the process. Would this turn out to be a very good week for the British currency? We needed one, and events in the news that threatened to derail the Brexit vote led to a good result for the British currency. By the time Friday night rolled around, the pound was standing at 1.2490 – the highest exchange rate we had seen for some time.

So, could we expect to see a similar pattern occurring against the euro as well? We began on 1.1122 here, and immediately dropped – if only marginally – to 1.1104 on Monday. We fell further against the euro on Tuesday, closing out that day on 1.1089, so clearly there was a different pattern in store here. We did then have two better days though, so by Thursday evening we were doing better on 1.1279. We couldn’t maintain that for the final day of the week, which meant we ended on 1.1260 against the euro – still better off than we’d been on Monday morning.

Onto the Hong Kong dollar now, and the pound got off to a good start here as well, rising from its starting rate of 9.4196 to 9.4266 on day one alone. We say ‘alone’ because every single other day saw the pound do well too this week. We had a similar pattern to the one we’d seen against the American dollar, with each day seeing the pound do a little better. In the end, the pound finished the week considerably better off, closing out trading on 9.6876 after some steep rises for the final two days.

So, with three good results thus far, could we expect two more in the shape of trading against the New Zealand dollar and the Australian dollar? Well, the pattern wasn’t quite as encouraging in New Zealand, because the pound started trading on 1.7013 before dropping back to 1.7005 on day one. However, after rising to 1.7013 on Tuesday and then falling to 1.6912 on Wednesday, the remainder of the week was a lot better. The pound managed to get up to a closing rate of 1.7080 by the time Friday night arrived. This was a smaller improvement, but a good result nonetheless.

Finally, we should see whether we’d get something similar against the Australian dollar. The first two days didn’t go our way and in fact we ended up dropping from the opening rate of 1.6043 all the way down to 1.5903 by Tuesday night. That’s when the better performance came into play, taking the pound to 1.6280 by Thursday night. While the final day didn’t go our way, sending the pound to a closing rate of 1.6257 for the week, it was better than where we’d started.

Notable events in the world of currency

Another vast improvement against the Canadian dollar

The week’s drama also saw a significant climb against the Canadian currency. From a starting position of 1.6264 – the lowest of the week – the pound climbed steadily to finish on 1.6778.

Smaller improvements against the Swiss franc as well

Here, the pound fell from 1.2073 to 1.1977 by Wednesday, before recovering to 1.2131 by the close of the week.

A similar pattern against the Icelandic krona

The pound dipped from 138.147 to 136.666 by midweek, before rising to finish only slightly better off on 138.366 by Friday night.

So, it was a dramatic week, and not one that saw better results everywhere. Yet the pound did finish in a stronger position against many main currencies.