Posted by Allison on 5 January 2011, 09:28
Welcome back to another currency report. As we approach the end of the year it is always a strange time on the currency markets. The currency converter can be rather interesting to view as everyone gets ready for the holiday season. So will we see good or bad results this time around for the British pound?
An opening rate of 1.5566 was on the cards as the final week before Christmas got underway for the pound against the US dollar. But it was downhill all the way for the pound as it dropped to 1.5440 by the time Wednesday was upon us. It was clearly not going to be a good Christmas for us because by the end of the week when everyone headed home for the festive season, the pound had slumped to 1.5417.
Elsewhere we had the Euro to square up to as well. Here the picture was rather different as we started on 1.1739 and progressed to 1.1817 the following day. However the dip then kicked in as we fell back to 1.1760. Hopefully we could sustain some kind of improvement for the remainder of the week. But in fact we ended up peaking at 1.1789 on Thursday before finishing on 1.1770 on Christmas Eve.
The pound versus the Hong Kong dollar would look more like the pattern we had experienced against the US dollar though. From a starting point of 12.105 we fell back consistently until the 22nd, when we stalled on 12.008. The following day saw us go below the next level to 11.981, and we finally ended trading before Christmas on 11.995.
Next up we see how the pound did against the New Zealand dollar. Here we began with a rate of 2.1102 but we soon realised that things were not going to go our way here either. One day later and we were on 2.0938 and that was followed the next day by 2.0776. We eventually finished the week on a poor 2.0607.
Finally we have the Australian dollar. We started on 1.5763 here but once again the pound simply did not have what it takes to get back on track by the end of the week. We finished up on 1.5362 in the end.
There was another disappointment here as the pound fell from 1.5681 to 1.5579 over the course of the week.
Here there was another poor result as the pound started on 1.4953 but could do no better than to finish on 1.4851.
Here too we could not do any better than to go from 70.580 to 69.556 over the course of the week.
So we can see that while we were all looking forward to the Christmas break, there was no good news for the pound before we finished for the week. As this story from the Reuters website proves, having a holiday such as Christmas looming on the horizon does little to make the currency market more active. Perhaps the gap in between Christmas and the New Year will be livelier, although it remains to be seen whether that is the case.
There is no doubt that the last few days of the year are always subdued when it comes to the currency markets. But it would have been nice to see better results and a little more confidence in the pound wouldn’t it? We can only hope that 2011 starts on a better note than 2010 seems to be ending on. However, we do have one more week to look at yet, so we shall be back soon to discover what happens in the final days of 2010 on the currency markets.