Posted by Allison on 7 April 2010, 11:18
Welcome back to another fresh look at the currency markets. In our last report we saw how the second half of the first shortened Easter week ended for the British pound. And if you were keeping a close eye on your currency converter you would have noticed that it was actually a good week for the pound all in all.
For the first time in what seems like ages, the British pound had a successful result against every one of the five major currencies we look at in our report each week. It managed to gain well over a cent against the US dollar, while it added on over one Euro cent against the European single currency as well. It was also a similar story in Hong Kong, as the pound took on the Hong Kong dollar and managed to improve the rate by 0.103 in those last two days before Good Friday.
But the best results were definitely reserved for the New Zealand dollar and the Australian dollar. The Kiwi dollar was definitely on the back foot against the pound, as the British currency added on over four cents against the New Zealand dollar. And while the result was not as good against the Australian dollar we still managed to add on nearly two whole cents against it on those last two days of the week.
So how will the second shortened Easter week pan out? Will we manage to get off to a good start and successfully make the Easter period one of the best the pound has seen in a while? Or will it slip back somewhat after the good start to the Easter period?
Let’s find out now by seeing how the currency markets got back into the swing of things on the Tuesday morning.
The starting rate for the week for the British pound against the US dollar was 1.5220. There was no trading on Easter Monday of course, but when things resumed on Tuesday morning there was a lot for the pound to try and achieve.
Unfortunately it could not quite hold onto the performance it had put in over the last week, and by Tuesday evening it had slipped back to 1.5181. Luckily this was only a loss of 0.0039, so it could have been a lot worse than it was. We still hope the rest of the week will pan out to be rather more positive.
So what of the pound’s battle against the Euro? What could it achieve over the course of the first trading day of the week?
The starting exchange rate here was 1.1301, and by the end of the day we had a rather better one to look at. Here we did manage to get a good result, as we achieved a rate of 1.1332. Let’s hope the rest of the week looks as good in this respect; the Euro is certainly struggling more than the pound at the moment.
Let’s move on to the Hong Kong dollar now, where we last left things on a rate of 11.821. Unfortunately here we followed the pattern we had set in motion against the US dollar, as Tuesday evening closed with a rate of 11.789 on the cards. Perhaps the second half of the week will be better.
But what about the two currencies we had the best results against last week? We had added on some four cents against the Kiwi dollar, so let’s hope we could get off to an equally good start this time around.
The starting rate here was 2.1618 and while it seemed hard to think we could start well on just one day, we did exactly that by climbing up to 2.1753. This meant we had added on a further 0.0135 in just twenty four hours.
Finally we come to the Australian dollar, which we left on 1.6596 last time after adding on nearly two cents to the exchange rate. We did drop back here though, falling back to 1.6456 by Tuesday evening.
So all in all not a bad start to the week, considering we only have one trading day to look at this time.
Let’s look at three other battles the pound took on to start the week this time. Here we experienced a loss of 0.647 as the pound dropped back to 67.545 from 68.192.
This was a worse performance too, as the pound dropped back from 1.5394 to a more dismal 1.5194 – a two cents loss.
Here at least we did a lot better, as we climbed from 1.6024 at the start of the week to a healthy 1.6234 on Tuesday night.
The Business Week site is associated with Bloomberg.com, and on Tuesday this site released the following article. It certainly made for interesting reading and it could indicate what we might expect to happen in the near future.
The other major announcement to kick off the week came on Tuesday, when the date for the General Election in the UK was finally announced. We all knew when it would be, but news that the Conservatives now appear to have a majority vote according to polls could help the pound. It could be one of the reasons why the pound has enjoyed a better few days than it has in the past.
It will be interesting to see how the pound fares in the coming weeks, as we now have a month before the election itself takes place. Will the battle help or hinder the pound – and what will the result do to it?
We shall have to wait and see, but we will share the results with you as they become known. We’ll see you again next week to tell you how the last few days of the current week have panned out.