Posted by Allison on 20 April 2009, 18:49
So here we are again with another look at the weekly currency markets. We lost a small amount of ground against the US dollar and gained an equally small amount against the Euro last time around, so we’re interested to see how things went last week. This would be the first week after the prolonged Easter weekend, which meant that once more we were looking at a short week of just four days for the most part.
Elsewhere we had lost a small amount of ground once more against both the Hong Kong dollar and the Aussie dollar, although at least we had something to put up against the New Zealand dollar. This week we will take another look at how we did against those same five currencies as Easter is forgotten and we get back into the swing of the daily currency markets once more.
Perhaps it is false thinking, but it seems to us as if the dire results of the past few months have abated slightly. Is everyone getting used to the idea of being in the middle of a recession now? The early shock of knowing that it had finally happened certainly seemed to have a great ripple effect, making plenty of erratic results occur on the currency markets.
But of course things can and do change rapidly in this area of trading. Some people are still worriedly looking at their currency converter and wondering how far their money will get them in another country. But others are perhaps feeling a little more optimistic about the strength of their own currency. So let us take a look at this week’s results on the currency exchange, to see where those top five currencies are headed as far as the British pound is concerned.
The last time we took a look at how the pound was standing up against the US dollar, we saw that it had stopped on a value of 1.4676 dollars to the pound as we headed off for the Easter holiday. Could we improve on that and push ever closer to the $1.50 mark now we had got back within a short distance of it – or would it slip away from our grasp?
Let’s find out.
As we know, Monday was Easter Monday so there was no trading on that day. But on Tuesday morning everyone was ready and raring to go, to see where the pound vs the dollar would go next.
And as it happened the week got off to a pretty good start. By the time the markets had closed on that first day back, we were left with a figure of 1.4891. Not a bad improvement given the fact that we had just got started for the week! The question was whether we could keep it up or not. We were about to find out.
Wednesday dawned bright and early and the markets got underway once more. There was only a slight change on that day, but once more it went in the direction of the British pound. By the time the markets finished we were standing on 1.4933. That was tantalisingly close to the fabled $1.50 mark that we were so desperate to regain. But could we make it over that final hurdle?
Thursday wasn’t so promising, since the pound dropped back slightly to finish on 1.4900. But it hadn’t lost a lot of ground, as it was occasionally apt to do, so we were still hopeful that we could finish the week on a better footing than we had started it.
But there was one more day to come in this shortened week – and it wasn’t going to go in our favour. By the time the markets closed at the end of Friday evening, the exchange rate between the British pound and the US dollar stood at 1.4791. That meant that over the course of the week as a whole we had actually added a little over a cent to the exchange rate. But it felt like a failure overall, because we had got so close to the $1.50 rate before losing ground and finishing further away from it.
So could we do better against the Euro? Was it possible that we could regain ground there as well?
We had managed to get up to 1.1057 overall last time, when we grabbed a slight increase. But we were looking for better still this week. And judging by the first closing figure of the week, recorded on Tuesday as the markets got back to normal, it was going to be a good one. At that stage we were standing at 1.1217 Euros to the pound – a full 0.016 higher than the finishing point the previous week.
And if we thought Tuesday was good, Wednesday had an even better result in store. By the time the markets closed on the second day of the four day week, we were registering 1.1336 Euros to the pound – a much healthier figure than we have seen in recent times.
But again Thursday’s figure seemed to suggest that it couldn’t last, and the pound was going to struggle to keep this performance up. The pound duly dropped back to let the Euro in again, and at the close of play on Thursday it stood at 1.1291 Euros. With just one day left to go, would the pound slide even further or would it come back fighting?
Amazingly for us – and perhaps unbelievably too – it came back fighting. The final exchange rate for the week was 1.1327. That meant the pound had won over the Euro for the week and added an impressive 0.027 Eurocents onto the exchange rate over the course of those four days. That gives us hope that we can do even better in the weeks to come, so let’s focus on that good result as we look elsewhere to see what else was happening last week.
Our next stop is Hong Kong, where we suffered at the hands of the Hong Kong dollar last week by losing 0.068 in total. We were starting from a point of 11.374 this time around, so what would the four day week hold in store for this particular head to head?
Once again the week did start well, and the pound seemed to be exhibiting some confidence in its performance in Hong Kong as well as elsewhere. By the time the excitement of that first day of trading on the Tuesday was over, we were standing at 11.541 – some 0.167 up on the previous trading day of the previous week. Did this bode well for the week ahead, or would we struggle to maintain the improvement?
As it happened we did manage to do better still the following day. We added a few more points on to the figure we had achieved the day before, and finished up on 11.573 at the day’s end. So we were two days into a four day week – but had we already seen the best that the week had to offer, or could we achieve still more in the second half?
Unfortunately judging by the result we got on Thursday it seemed as if the former was true. By the end of trading on that day we had slipped down to 11.548 – leaving us just 0.174 up on the final figure of the previous week. Could we mend things for the final day, or was the Hong Kong dollar going to stay a nose ahead for the week as a whole?
Yes, you’ve guessed it – after that initial hard work and good result, the Hong Kong dollar came back to bite us and we finished up on 11.463 for the week. That meant we were still slightly up on the previous week’s closing figure, but only by a total of 0.089. A good result, but it could have been a lot better if we hadn’t lost ground over the last couple of days.
Next it is on to the New Zealand dollar, which always seems to give us a run for our money. Last time we finished up on 2.5293, gaining a tiny amount over the four day week before Easter. Could we now gain more in the four day week which was following on from the holiday?
Tuesday brought us very little difference at all. By the close of play when everyone went home, the pound stood at 2.5289 New Zealand dollars – just slightly lower than it had been the week before. It didn’t give us too much to worry about however, and as things turned out the week was going to get very interesting very soon!
So the next day came and currencies were traded around as usual. And by the end of the day we were looking at a very different figure indeed. The pound was now claiming a total of 2.5974 New Zealand dollars. That was an improvement of nearly seven cents in just twenty four hours. We often see extreme changes in this case, but even that was impressive.
The following day was just as good, adding another small amount to the ex change rate as we finished up on 2.6125 for the day. As it turned out Friday was going to let the side down as we lost some ground – but given what we had achieved before that it almost didn’t matter. Friday’s closing figure ended up being 2.5930, which meant that we had gained well over six cents over the week as a whole. Now that was worth celebrating.
So how did we do against the Australian dollar? Did we manage to do just as well, or would we end up with an average result to close out this report with?
Let’s see what happened. Last time it beat us to the punch and we ended up on 2.0560 at the end of the week. But it would turn out to be just as entertaining this week as it was previously, as by the end of that first day back we were on 2.0438. So first blood went to Australia – but we had something up our sleeves for the next day.
And it was a big something too – as we finished up on 2.0804, adding a nice healthy three and a half cents in just twenty four hours. But perhaps predictably we fell back slightly the next day, losing out as we dropped to 2.0680. With just one day left could we regain some ground and make it a huge week against the Aussie dollar, or would it succeed in getting the better of us?
As it turned out, the final figure of the week was 2.0531. So we lost ground again from the previous day, but on the whole we lost just 0.0029 over the course of the week, so there was not too much to cry over.
What a week it was then, and we await the next set of figures with bated breath.
If you were hoping to see the Euro doing better this week, it didn’t manage it against the Aussie dollar. After ending on 1.8221 on the first day back after Easter, it finished lower on 1.8125 by the time the week was out.
A bad week for the Euro got worse as the US dollar put the boot in as well. An exchange rate of 0.7532 on the 14th went up to 0.7658 on the 17th, revealing that the Euro would rather forget this last week.
The yen had a good week against the Hong Kong dollar, starting from 0.0773 at the beginning of the week and climbing to 0.0780 by the end of it.
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So here we are at the end of another report. It has been an interesting and slightly more positive week for the pound, but all in all we should say that perhaps we have turned something of a corner.
We have had plenty of weeks where we have struggled to find any good news for the pound at all. And yet now we have had a few reasonable weeks. Does this mean there is more to come?
Let’s hope so. We will be here to tell you more next week.