Posted by Allison on 4 January 2010, 14:15
So here we are with our run down of the currency markets for the Christmas week. As is usual at this time of year the markets are not open for the entire week, so we have a limited amount of data to share with you this time around.
But before we do that, let’s take a brief look back at the previous week to see where we left things on the world stage with the five main currencies in play. It was actually a very good week for the pound, as it achieved three good results out of five. The two currencies which proved to be too strong for it were the US dollar (perhaps not surprising, as it caused the pound to lose out to the tune of 0.014 cents) and the Hong Kong dollar. The latter saw the pound lose a total of 0.098, leaving it on 12.537 for the final week before Christmas.
So what of the three currencies the pound did achieve good figures for on the currency converter? These were the Euro – a healthy addition of two cents there – the New Zealand dollar and the Australian dollar. The latter two saw the biggest jumps up of all, with the pound claiming 2.2803 New Zealand dollars at the end of the week. That equated to an increase of over four cents, and the picture was a very similar one against the Australian dollar as well. The final exchange rate in Australia was 1.8214, totalling an increase of four and a half cents in all.
So we were clearly going into Christmas week with some good results all told. Since Christmas Day fell on a Friday in 2009, this meant we had four days of trading to look forward to, going right up until Christmas Eve. Where would the pound stand once we were all ready to celebrate and leave the currency market behind for a few days?
Let’s find out, shall we?
So here we go with the first look at the first currency pairing for this week – and this is the pound going head to head with the US dollar. The final exchange rate from last time was 1.6163, after having dropped just over another cent against the American currency. We hadn’t had a good couple of weeks against the dollar here, so could we do anything to make Christmas week one to remember?
We would clearly have some work to do because we didn’t get off to the best start at all. By the time Monday night came the British pound was standing at 1.6111. This half a cent loss wasn’t the best way to try and get a better exchange rate for the week, but there was a long way to go yet before the shortened week came to a close.
However the results we ended up with on Tuesday seemed to indicate that the pound was not destined to have a good week. Try as it might it simply couldn’t muster up the power to take on the US dollar and come out in front. That meant the pound finished up even lower by the end of the second day of the week – this time on 1.5989.
This equated to a loss of 0.0122, which may not sound like much but when you consider that it is more than we lost over the whole of the week before, it is clearly something to be concerned about. Could we find anything to tackle the US dollar with to enable us to come out on top?
Wednesday the 23rd December seemed to indicate that the answer, for now at least, was no. The day drew to a close with the pound struggling to claim 1.5956 in total. This shortened trading week meant there was just one more day to go before Christmas got underway in earnest, so could we do anything to make Christmas Eve a magical day for the pound on the currency markets?
Well it wasn’t exactly magical but we did at least manage to up things a little and minimise the amount of damage we did over the week as a whole. By the time Thursday evening came and everyone’s minds turned to Christmas itself, the pound closed for the seasonal break bagging a total of 1.5983 against the US dollar. It could have been worse, but this is the third week of losses in a row against the US dollar. This time around the losses amounted to just under two cents – 0.018 in total. We can only hope that the closing few days of trading in 2009 will take us into the New Year in slightly better shape.
Let’s leave the US dollar behind now and see whether we could achieve anything better against the Euro. The final exchange rate last time for the pound against the European currency was 1.1273. This was one of our better results for that week as well, with the pound claiming an additional two Euro cents at the end of the week as compared to the beginning. Could we do something similar again this time with the four days of trading available to us?
Let’s see what happened. From that starting point of 1.1273 the pound unfortunately dropped the ball straightaway and fell to 1.1213 by the end of day one. The 21st December wasn’t going to be a memorable day for the right reasons, but could we turn things around and make a difference the next day instead?
Unfortunately the answer was once again going to be in the negative. The pound could not seem to get a handle on the European currency at all, instead following a similar pattern to the one we have seen against the US dollar. By the end of day two the pound had slipped back further, claiming a total of 1.1197 Euros. Slipping beneath that 1.12 mark was somehow symbolic of our struggles as well, and though the loss was not huge it was enough to make us wonder whether we could pull anything good out of this week at all.
And once again the pattern was repeated on Wednesday the 23rd. By the close of play on that day the pound was on 1.1176. You can no doubt see that the losses are relatively small ones compared to what we could have found ourselves coping with, but they still add up when you put them all together.
And of course Christmas Eve would be the last day of the week, as there would be no trading on Friday. And one day would not prove to be enough to remedy the pains we were going through. Instead we dropped back even more to land on a closing exchange rate for the Christmas week of 1.1101. That made the total losses for the week 0.0172, which served the purpose of almost cancelling out the amount we added on the week before. So a good result was lost in just four days of trading in a new week – let’s just hope we can do better as 2009 gives way to 2010.
Meanwhile let’s move on to our third stop, which is the Hong Kong dollar. Now we didn’t have a good time against this currency the previous week, losing a total of 0.098 and finishing up with 12.537 to start from this time around. Was this to be another bad result for the pound to go alongside the two bad results we’ve racked up so far? Or could we hope to do better and make this one currency that we could achieve a good result against?
Let’s see how things panned out. Unfortunately they didn’t get off to the best start – and in fact we ended up following the same pattern we have already seen against the US dollar and the Euro. No sooner had we started the week than we were on a lower exchange rate by the end of the first day. This time it dropped back to 12.492 – losing a total of 0.045 along the way. Would this turn out to be the same ‘lower every day’ pattern that we have already followed elsewhere?
Tuesday’s result certainly seemed to point in that direction. By the end of the second day out of the four trading days of the week, we had dropped even lower to land on 12.400. Could we turn things around or were we destined to end the week as we had elsewhere in the world?
Wednesday pointed to the latter being true. The pound tried its best to take charge over the Hong Kong dollar, but we could manage no more than 12.372 all in all. This wasn’t turning out to be a memorable week for the pound, and we needed to do better. Could we turn things around in the last day available to us against the Hong Kong dollar?
As it turned out we did manage something – if only a small gesture of an improvement. By the time the markets closed on Christmas Eve, the pound had managed to add on a miniscule amount to claim an exchange rate of 12.393 against the Hong Kong dollar. But even though the week had ended on a slightly higher note, we had still managed to lose overall – this time to the tune of 0.144.
So far it has not been a good week for the pound. But would things change in New Zealand and Australia? We enjoyed a good performance in these two countries the week before, adding on a total of four cents and four and a half cents respectively. Could we repeat that this time around?
Our starting point in New Zealand was 2.2803, but unfortunately we lost that impressive lead after just one day of trading. By the end of Monday’s day on the currency markets the British pound stood at a lower rate of 2.2692. Was this going to be the way the whole week would pan out?
There was at least some hope on Tuesday as the exchange rate improved to 2.2724. But somehow this failed to make us feel too optimistic. It had been too tough a week elsewhere to be impressed by a small gain after a big loss the previous day.
We did at least manage to improve our standing again the following day when we added on another small amount to finish on 2.2739. But that would be the best we would manage. The markets closed on Christmas Eve with the British pound claiming just 2.2636 New Zealand dollars. That meant we had lost out on a total of 0.0167 overall. Not a good week for the pound, and with just one currency left to try and succeed with, we weren’t holding out too much hope that we would manage it.
Our starting point with the Australian dollar was 1.8214, after a good week last time around. But once again things went south very quickly for the pound. By Monday evening we were looking at an exchange rate of 1.8177. Only a small dip perhaps, but we have already seen such dips occurring against other currencies this week, and it could lead to something much worse.
Day two at least bucked the trend by landing us on 1.8206, so while we didn’t regain our starting point we at least managed to get back fairly close to it. Wednesday saw another dip though unfortunately, and that meant we were back to 1.8184. Could we turn things around or were we simply destined to end up on a lower exchange rate across the board this week?
It seemed the latter was true. By the time the markets closed on Christmas Eve, we were sitting on an exchange rate of 1.8088. So it could have been worse but we still lost out on 0.0126 all in all.
The pound couldn’t do anything to successfully go up against the Swedish krona either. It dropped from 11.665 on Monday evening to 11.605 on Thursday evening.
The US dollar bagged 0.6959 on Monday evening before heading to a week long high of 0.7004 on the 23rd. But it finished up on 0.6945 on Christmas Eve, leaving the Euro slightly in front.
The Icelandic currency did at least manage a slight leg up against the European single currency. It went from 0.005445 on the 21st to 0.005501 on the 24th.
You can read more about the woes of the pound and its performance on the 24th December by accessing this report from the Reuters website.
So there we have it for Christmas week – and it certainly wasn’t the best week for the British pound. But will we be able to say goodbye to 2009 on a better note and welcome in 2010 with better exchange rates? We’ll be back soon to let you know.