Posted by Allison on 24 June 2009, 10:55
Here we are again with another weekly look at what has been going on in the currency markets around the world. As you will know if you are a regular reader, we’re looking at how the British pound does against a number of other major currencies, including the US dollar and the Euro.
And last time around we had some fantastic results to look through. In fact we had managed to gain against all of the five currencies we always take a look at. That was a nice change from the previous week, when it seemed as if the pound had gone into freefall for a while. The European elections had certainly proved hard for the British pound to negotiate its way through. Our government was then having an equally tough time that appeared to have a pronounced effect on the results we were seeing.
But as things were back on a good footing last time, how will things shape up in this weekly report? Will we see a better performance once again, or will things be back on a downward spiral?
We are hopeful of some good results once more – even if they don’t go right across the board. This is mainly because in general things have been looking rather good of late. The question now is whether that trend is capable of continuing, or whether the pound has just had a good patch that is coming to an end.
Let’s not be too pessimistic though, because we feel the results could be good all in all. But of course there is only one way to find out, so let’s see exactly what happened during the last few days in the currency markets.
Well we certainly saw a great time against the US dollar last time we looked, didn’t we? If you remember the final exchange rate during the last week was an impressive 1.6401. We had managed to add on a total of 0.0277 during a single week, so we were looking hopeful of adding a little more onto that total this time around.
But what did we actually do?
Let’s take a look. If we were looking to get a great start to the week, we certainly didn’t manage it. The figure we were left looking at by the close of play on Monday was 1.6347 – a drop of around half a cent. It might not sound like much but it was certainly not what we had been hoping for.
Luckily it seemed as if we took a while to get going last week, as there was better news in store for Tuesday. This was a much more encouraging day, and not only did we manage to regain what we had lost during Monday, we also managed to add a little more onto the exchange rate as well. The closing figure on that day was a resounding success – finishing up on 1.6463 by the end of the day.
So what did the rest of the week have in store?
Well as things turned out it would be something of an up and down week. You never quite know what to expect when things are up and down on a daily basis, and we were certainly heading for a fall on Wednesday. At the midweek point our exchange rate against the US dollar had dropped markedly to 1.6240. Did this mean we were in for a poor end to the week, or would we soar back up again at some point? We only had two more days to go, so the answer was still hanging in the balance.
Thursday actually brought a small change to the exchange rate, but unfortunately it didn’t go in the favour of the British pound. The US dollar exerted a tiny amount of pressure and we managed to finish on 1.6218, slightly down on the day before.
It wasn’t looking particularly good for the pound this week, and with just one day to go we had a lot of work to do if we wanted to turn the week into a success. And the final exchange rate achieved as everyone quit for the weekend was 1.6445. That meant we had actually added a tiny amount to the exchange rate over the last week – but only a small 0.0044 in total. At least the week wasn’t a complete failure though, because at one point it looked like we were going to lose a lot of ground there.
So breathing a sigh of relief of sorts, let’s move on to see how we did against the Euro. Last time we added more than three Euro cents onto the exchange rate and finished up on 1.1712. Could we push ahead further this week, or would we have a weaker performance as we had against the US dollar?
Well Monday certainly set us off in the right direction. By the time the markets closed on that day, we’d got ourselves higher up on 1.1803. That was nearly a cent higher than we’d started on, so that was at least a good start to the week.
What was in store next though? The difference wasn’t as pronounced on Tuesday, but we still kept heading in the right direction thankfully. At the end of the day the exchange rate had crept up slightly further to 1.1852. Was this going to be one of those examples where the rate just keeps heading up ever so slowly all week, or would we end up with a surprise in store where we started to fall behind?
As it happened, unfortunately for us, the latter would turn out to be true. Just as we might have been lulled into believing that upward pattern would last for the whole week, something else happened instead. Wednesday’s turn of events certainly didn’t go in our favour. After the good work the British pound had put in against the Euro over the first two days, we had a surprise in store on Wednesday. By the close of play we had fallen back to 1.1734. Not a huge drop perhaps, but still enough to wish we had been stronger and more able to hold our own.
And unfortunately it wasn’t the first drop in sight for that week either. Thursday brought another one, as the exchange rate dropped back further in favour of the Euro to 1.1650. Were we about to lose all the ground we had gained earlier in the week?
Thankfully Friday had a last minute surprise in store for us. By the time the markets closed for the last time that week, we were standing at 1.1804. This meant we had actually still managed to add nearly a whole cent onto the exchange rate, despite all the ups and downs we had experienced over the week.
So there we have two good results so far. What happened over in Hong Kong? Last time we finished on 12.712, so we were looking for another good result this week if at all possible.
But Monday didn’t get off to the best start as we finished up on 12.670. Was this a bad omen or was it a case of just taking time to get started properly?
Tuesday seemed to prove it was the latter, as the exchange rate went back up to 12.759 by the time the day was out. It didn’t seem that Wednesday was set to be a good day though, as we dropped back down to 12.586. And unfortunately Thursday continued the bad streak with another drop down to 12.569.
This was certainly proving to be a week where there would be lots of changes, and many of them weren’t good ones. But elsewhere we had seen good results on the last day of the week after previous bad ones, so could we do the same in Hong Kong?
In actual fact we could, as the final rate for the week as everyone went home for the weekend was 12.745. That meant we had added on another small amount to the big result we’d had last time – this time being 0.033.
So that is the third good result we’ve had so far – three out of three in fact. But would the same results be in store in New Zealand and Australia? Let’s take a look at New Zealand first to see whether we could make it four out of four there.
We had gained over three cents last time around, leaving us on 2.5641 at the end of the previous week. And Monday certainly got us off to a great start, because by the end of the day we had finished up on 2.5912. That alone meant we had added nearly three cents on again in just twenty four hours of trading. The question now was whether we could hang onto that.
As it happened we did dip back slightly on Tuesday, finishing up on 2.5849 by the end of the day. That wasn’t too bad considering what we’d gained the previous day, but it was enough to make us wonder whether we would lose all those gains by the end of the week.
Things were looking up the next day again though, as we increased our standing to 2.5905. Could we stay there for another couple of days?
Unfortunately the answer was a resounding no. We ended up with a very bad result on Thursday, as we sank down to 2.5542. Did that mean we were going to lose ground against the New Zealand dollar this week?
Well we did manage to add a little bit onto the exchange rate on the last day of the week, and that meant we finished up on 2.5597. But we had lost ground overall, although not by as much as you might think after all those ups and downs. The end result was a loss of 0.0044.
So onto Australia now, so we can see the last result of the week. We had grabbed an additional two cents last time to finish up on 2.0209, so what could we do this time?
Once again we had a great start to the week, with a jump up to 2.0402 by the close of play on Monday. And Tuesday had some more good news in store too, as we managed to turn up the pressure on the Australian dollar and finish the day on 2.0533. Was there more of this to come, or would we experience a drop here too as we had seen in New Zealand?
In actual fact we did creep up ever so slightly on Wednesday as well, finishing the midweek point on a respectable 2.0567. Thursday brought news which wasn’t as good, although it could have been worse – the British pound ended up on 2.0421 at the close of that day.
So with one more day to go, we were hoping that we could hang on to much of our gains, if not all of them. And indeed we could – the final exchange rate on Friday, for those who were checking their currency converter, was 2.0401. That meant we had added nearly two cents onto the exchange rate once again.
So it turned out that it was a pretty good week for the British pound again, with just the New Zealand dollar letting us down. But most of the ups and downs when all was said and done were small ones, so let’s be grateful for the good ones we did get.
At the close of play on Monday, the US dollar was picking up 1.2480 Aussie dollars. By the midweek point, that had picked up to 1.2664. But by the end of the week things had changed again, and we were back down to 1.2405.
You would have been forgiven for thinking nothing much had happened between the Canadian dollar and the US dollar last week. The Canadian dollar bagged barely half a cent increase between Monday and Friday.
It may have been standing at 90.059 by the close of play on Monday, but just four days later the Swiss franc could only muster up 89.286. Better luck next week, perhaps?
Every now and then you hear about a particular currency struggling. And just lately it has been the Latvian currency that has been taking centre stage in this respect.
As you can see in this BBC news article - it could be devalued before too long. Whether or not it will come to pass remains to be seen, but the article does describe the situation and how it has occurred very expertly indeed.
So it has been a reasonably good week all in all. There haven’t been any huge changes in the exchange rates – mostly small ones here and there – but the ones we have seen were definitely worth it.
We’ll be back again next week to share the next set of results with you. See you then.