Posted by Allison on 25 August 2009, 10:59
Each week seems to come round faster when we are looking at the currency markets. And we were certainly looking forward to this week with real hope, because the week before was dreadful in terms of the currency markets. We had five losses then, leaving us worse off than we had been the week before in every one of the five main currencies we look at each time.
Of course not all the losses the British pound incurred were really bad, but most of them were bad enough to be embarrassing. It tipped the balance in a bad way as well, because up until then we had been looking quite positive at the recurring strength of the pound. We hadn’t been doing brilliantly, but we had been creeping up to bag better results week by week before then. We were feeling quite positive until we saw the results for that previous week.
So if you have got your own currency converter close at hand you might want to check out the rates you will get after this week’s results. We are almost feeling hesitant to take a look at what happened last week, in case the results mirror the bad ones we had seen before. The one thing in our minds was this – were those bad results just a one off, or were they the first in a series of bad results that would get worse as time went on?
Of course there is only one way to figure out what the answer is to that question. And that means we have to take a look at the results we got last week. So if we are all ready to see what happened, let’s do just that right now. And let’s hope we have at least one result to celebrate in a few moments’ time.
Last time you will remember that we lost a good cent and a half against the US dollar. That left us sitting on a lowly 1.6590 for the week. So the question is whether or not we can grab back that cent and a half this week, or whether we will lose even more.
Let’s find out what actually happened. We always look for a good start to the week but unfortunately we didn’t get what we wanted. By the time trading had finished on Monday evening and everyone went home, the exchange rate was standing at 1.6307. That meant we had already lost out on nearly three cents in what was in effect a single day. This certainly didn’t bode well for the rest of the week, and it made us feel somewhat frustrated – not to mention worried – at what could happen next.
There was better news the next day as the exchange rate went back up to 1.6461. That had added on a cent and a half from the previous day, but we were still racing to catch up with where we had started from. This was certainly not turning out to be a good week – at least not for the British pound.
The midweek point cemented this fact in place with a lower exchange rate once more. By the time the end of the day came on Wednesday, the British pound was only managing to bag 1.6394 US dollars. After managing to add a cent and a half back on, we were now half a cent (and then some) behind again. Could we possibly manage to redeem ourselves for the week, or was it too late to do anything like that at all?
Well the British pound is nothing if not determined, and Thursday brought a little better news as the exchange rate pulled itself back up again to 1.6488. But yet again this was still lower than we had started the week with. There was a whole lot of work to do here if we were going to improve our standing against the US dollar from where we were the week before. And somehow, as we were now on Thursday evening, it did seem like rather a lot to ask that we could succeed in improving the exchange rate against the US dollar.
So let’s see what happened on that last day of the week. We did at least manage to do better once again, and by the time everyone headed home to enjoy the weekend the British pound had crawled back up to 1.6553. Now if you remember we had started off on 1.65 – but that figure was 1.6590. So in reality we were still further down than we had been the week before. Luckily though (if you can call it that), it wasn’t as bad as it could have been. The total loss was just 0.0037.
So with that in mind to ponder over, let’s move on to the Euro territory. The final figure for the pound against the Euro last time was 1.1606, after having dropped a total of 0.0066 for the week. Could we possibly do a little better this time around?
Well once again, as with the US dollar, we didn’t get the good start we wanted. The depth of the loss wasn’t quite as bad as it had been with the US dollar though, and here we finished up on 1.1588 by the end of Monday. What was in store for the remainder of the week?
Well things did at least get better the following day. By the close of play on Tuesday we had finished up on 1.1674. Now this was better than the closing rate we had bagged at the end of the previous week. Could this be a sign of how the rest of the week would play out? Could we possibly be heading for a better result by Friday evening?
Well before you get too excited let us deflate things a little by announcing Wednesday’s exchange rate. Yes, things got a little worse for us then, as we slipped back a bit and finished up on 1.1617 against the Euro by Wednesday night. So with just two days to go, the up and down pattern meant that anything could conceivably happen on those final two days.
Unfortunately things headed downwards again the next day. By the end of Thursday evening the pound could only claim a total of 1.1576 Euros per pound. This wasn’t good news at all, and it was beginning to look like we were going to get a bad result once again, making two in a row for the pound against the Euro.
So let us get it out of the way and see how things finished up on Friday. We did indeed have another loss there and by the time the markets closed the British pound finished up on 1.1551. Only a small drop that time, but it was enough to lose out on around a half a Euro cent over the whole week.
So far then we have two bad results out of two. Does this sound familiar when compared to the week before? It does so far, but let’s see if we can buck the trend here.
In Hong Kong last time we lost out to a total of 0.131 and ended on 12.857 on Friday night. Could we improve on that this time?
Well once again we had a bad start to the week by dropping back to 12.639 by the close of play on Monday. Was this the ominous sign we didn’t want to see? Were we going to end up with another bad week in Hong Kong too?
Tuesday was at least a little more positive, bringing in a final exchange rate for the day of 12.759. That added on a total of 0.12 in a single day, so could we use this as a springboard to be able to improve for the rest of the week?
The answer was apparently no. Wednesday let the side down as far as the British pound was concerned, as we dropped back to 12.708 by the time the markets closed for the day. So was this the other side of the mountain we had climbed so far during the week? Would we now drop back for the remainder of the week?
Well if we were braced for bad news we actually didn’t get it this time. We finished up on 12.780 on Thursday, so that was a nice surprise. And there was more in store for the last day of the week as well. As everyone headed home to relax for the weekend, the pound had at least managed to pull itself back up to 12.830 to close out the week. That meant we had still lost out on a total of 0.027 over the whole week though, which was a shame. It almost felt as if we had succeeded in doing well here this week, and in fact it was our third loss out of three.
The previous Friday evening we had managed to claim a total of 2.4123 New Zealand dollars against the pound. That was after a loss of seven and a half cents in a single week. So needless to say we were praying that the pound could pull itself back to reclaim some of those losses this time around.
Monday got off to a brilliant start as the pound jumped back to 2.4516. That equated to an increase of nearly four cents in a single day. Now could we hang on to that increase?
We did drop back slightly the next day but only to 2.4498, so we could handle that small loss. And things perked up again the very next day, as we got ourselves back to 2.4521 again.
But unfortunately that was where the good news ended. On Thursday evening the exchange rate had flagged and it stood at 2.4374 at the close of play. And it got worse before the week was out as well, as we crawled in to the end of the week on 2.4275. But in total we had actually done well here and managed to add on a total of a cent and a half here. A good result to report at last!
So how would we end the week? Would Australia’s exchange rate with the pound go the same way as its closest cousin the Kiwi dollar? Or would it be more in keeping with the US dollar and the Euro?
Let’s see. We lost nearly four cents in total against the Aussie dollar last time, leaving us on 1.9659 at the end of the week. And by the end of Monday we had sprung back to 1.9942. Could this be a good week after all?
Things improved a little more the following day, as we increased our standing to 1.9981. And we even managed to break through the two dollar barrier during Wednesday, leaving us on 2.0026 at the end of the day. That was as good as things got for the week though, and just twenty four hours later we finished up on 1.9824.
Things got a little better on Friday as we managed to snag an exchange rate of 1.9864 to finish off with. That meant we had added on a couple of cents over the week, giving us two good exchange rates and three not so good ones in total. Well at least that was better than the previous week!
The Aussie dollar may not have got the better of the pound, but it did get the better of the Euro this time around. It wasn’t by too much though, as it finished on 0.5811 on Monday evening and 0.5814 just four days later.
From 0.7106 on the Monday evening to 0.6978 on Friday evening, it was clear that the US dollar didn’t have what it took to get a better result against the Euro last week. Could it do better next time though?
If you were expecting a big difference between these two currencies last week you would have been disappointed. The Aussie dollar claimed 1.2293 Kiwi dollars on Monday night, and that changed to 1.2220 by Friday evening.
There was apparently good news for the Euro in general last week though, as several news reports said. This news story from the Bloomberg website – is typical of the ones that were published.
So there we have it – not the best week we have ever seen but it was better than the week before. That at least is something we should be grateful for, so perhaps we should hope for the coming week to be even better?
We can at least hope.