Posted by Allison on 13 July 2009, 10:46
Well here we are again with another weekly look at what has been happening in the currency markets. If you enjoy seeing how various currencies go up and down each week, you should get your currency converter at the ready so you can see what happened in the latest round of results.
Last time we saw how the results of the British pound could be very different depending on which part of the world you were looking at. For example, there were three results where the pound was worse off than it had been the week before. These were against the US dollar, the Euro and the Hong Kong dollar. Luckily for us – if you could use that term – the differences were marginal, so we didn’t actually lose out on too much. Things could have been a lot worse, as we have seen in the past.
But where the New Zealand dollar and the Australian dollar were concerned, we did rather better. The pound grabbed its best result of the week against the Kiwi dollar, but it still managed to up the ante against the Aussie dollar too, if only by a small amount.
The question now is whether we will see a similar pattern this week, or whether there will be better results all round for the British pound. It largely depends on how the events of the world – and more precisely of the recession – have been affecting certain parts of the world. We’ve seen recently how this can be the case, and although everyone is suffering it is more noticeable on occasion how certain currencies seem to have a worse time.
So let’s see what really happened last week, and which currencies actually managed to have some better results.
Okay, so let’s start as we always do by taking a look at the results the pound managed to get against the US dollar. Last time we saw the dollar get the upper hand by gaining one and a half cents against the pound, leaving us on 1.6360 at the week’s end. What would happen now?
Well if we were hankering after a good start to the week we certainly didn’t get it. And in fact it was very much in the opposite direction as we lost a lot on that first day. We finished up on 1.6136 by the time the markets closed on Monday, which essentially gave us an uphill battle to struggle with for the rest of the week. Could we rise to the challenge we had just set ourselves, or was this bad news as the rest of the week took hold?
Tuesday brought better news of sorts as we moved back up to reclaim an exchange rate of 1.6229. But this still didn’t replace all the losses of the day before, let alone climb up to over the exchange rate we had been left with the previous week. So what could we do now?
Unfortunately Wednesday had more bad news for us. By the time the markets closed on this midweek point we were left with a figure of 1.6071 to contemplate. Was this another sign that this wasn’t going to be a good week for us? It didn’t seem as if we were going to gain anything at all, and we were still struggling to get back to where we had finished up the previous week, let alone add anything else on the exchange rate.
Well we had two days to go still, and we saw another jump back up again on the Thursday. By the time the markets had closed on that penultimate day of the week, the pound had dragged itself back up to 1.6256 again. This meant an increase of almost two cents overnight.
But of course we have already seen similar increases this week and it hasn’t ended up lasting. And with just one day to go for the week as a whole, could we actually manage to make a gain for this week?
It didn’t look very likely, and in fact it didn’t happen. Following the pattern that had already been set earlier on in the week, we actually managed to lose out once more. But this time it was thankfully by a smaller amount. We finished up the week on an exchange rate of 1.6201, meaning that we had lost out on just over a cent and a half over the week as a whole. Around the same amount of losses as the week before, so it hasn’t been a good time against the US dollar of late. Better luck next week perhaps?
Let’s move on to see how we could perform against the Euro now. This was another currency that we hadn’t done well against last time out, ending up on 1.1678 at the close of play the previous week. Could we pull ourselves up by the bootstraps and do better this time around, or was the result seen against the US dollar indicative of what would happen elsewhere?
We certainly didn’t get off to the best start, with a loss recorded on the first day of the new week. By the time everyone headed home on that first day, we had finished up on 1.1611. Only a small loss thankfully, but it was still enough to make us wonder whether we would end up with another bad result here.
And indeed Tuesday seemed to confirm this, as our exchange rate against the Euro went very firmly in their favour. By the close of play the rate had changed to 1.1576. It wasn’t a huge difference, but it went in favour of the Euro once more, and that was the more telling event of all.
There was another dip for the pound on Wednesday, although by then the rot seemed to be slowing down. The final exchange rate had stalled on 1.1561, leaving us to wonder whether we could now turn the tables and get things back in our favour again. And indeed we did see a better result by the time Thursday was over and done with. We had pushed back and managed to secure an exchange rate of 1.1619 by the end of the day.
There was still one more day to go though, and it seemed too much to hope for that we could add on enough to the exchange rate to actually win a good result against the Euro for the week as a whole. After all, we’d started out on 1.1678 at the beginning of the week, and Thursday had ended with us on 1.1619. That meant we were still behind considering where we had started. Was there any hope at all of making things any better?
Well we did try to strengthen the pound and do whatever we could to improve our situation. But in the end, although we did add on a little to the exchange rate against the Euro, it was perhaps too little, too late. So we finished the week with an exchange rate of 1.1655. We had actually lost just 0.0023 over the course of the week, but you get the feeling that but for that bad start, we could perhaps have done better.
We really had a tough week all in all, because we lost out on some ground very early on and then had to work hard to try and regain it before we could even add any value to the pound at all. It was too much to do last week – so perhaps we can do better next time?
With that in mind, let’s move on now to Hong Kong, to see how we did against the Hong Kong dollar. We lost out on a significant 0.108 against this currency last time round, leaving us on a starting point of 12.679 for this week. Would we see a similar pattern this time of a bad start followed by a rush to rectify our problems? Or would we do better here?
Well we certainly had the bad start to go from – at the end of Monday we finished up on 12.506. So we had already made life hard for ourselves. On Tuesday there was better news though, as we managed to climb back up to 12.577. Could we now continue this momentum upwards, or would we end up sliding back again?
The answer turned out to be the latter, as we finished up on 12.455 as the midweek point came and went. Just two days to go now to try and pull a good result out of the bag, but it didn’t look promising.
Thursday did see a good increase though, as we sprang back up to claim an exchange rate of 12.598 at the end of the day. Friday did see us slip back once more, but thankfully not by too much. The final exchange rate for the week was 12.556, which meant we had still lost out over the week as a whole. By the time we finished, we had lost 0.123 – slightly more than we’d lost the previous week. This wasn’t turning into a good week for the pound.
New Zealand brought better news last time with an increase of around three cents for the pound, leaving us on 2.5832, so could we do the same here this week?
Well once again Monday saw a drop to start the week with, leaving us on 2.5748 overall. It looked like the pattern was repeating itself, but there could be more in store here yet.
There certainly was – but it wasn’t what we wanted to see. Tuesday brought a huge drop to 2.5464 for the pound, and that meant we had an uphill battle to climb and try to win. But we regained a lot of that lost ground the very next day, climbing back to 2.5629 overall. Could we do more for the remaining two days of the week?
Well, it seemed that we could, as we climbed up further to claim an exchange rate of 2.5788 the very next day. With just one day to go, was it too late to claim an increase over the week as a whole?
Luckily for us, the answer was no. The final exchange rate for the week was 2.5932, meaning that we had actually added a cent on over the course of the week.
That was the first good result for the pound so far, but could we add another good figure on? Let’s go across to Australia to find out.
Here we finished on 2.0498 last time and while Monday saw a slight dip there wasn’t really much in it. We finished on 2.0442 this time, so we had only lost a small amount of ground. What could we do next?
Tuesday didn’t bode well for the rest of the week as we slipped back to 2.0240, but there was still hope. And hope was the right thing to have, as by the next day we were on 2.0495. Could we stage a comeback and have a good result to celebrate by the time the week was out?
The answer seemed to be yes if Thursday’s closing figure was anything to go by. We increased to 2.0719 on that day, and the following day was even better as we soared up – almost unbelievably – to 2.0909. That meant we had added on over four cents across the week, giving us two results to be proud of this time around.
It could have been better, but let’s take the victories where we can get them, shall we?
We weren’t the only country to have a good week against the Aussie dollar. From a finishing exchange rate of 1.2668 on the Monday, it climbed to 1.2905 by the end of the week.
It was up and down quite steadily for these two currencies, heading from 1.15 Canadian dollars claimed by the US dollar one day up to 1.16 the next. And the pattern continued all week as well.
They may have finished the Monday on 0.4509, but by Friday night the New Zealand dollar was claiming 0.4494 Euros. Could they perhaps do better next time?
The Market Tips section of the CNBC website made for interesting reading on the 10th July. In particular the reserve currency system made headlines.
So there we have it for another week. The pound did at least do well in two different regions, but its poor performance against the Euro and the US dollar doesn’t bode well. Fingers crossed we can turn this around – and we’ll be back next week to see if we can.
We’ll see you then.