Posted by Allison on 16 April 2009, 11:39
But it wasn’t all rosy as far as the dollars were concerned. We also lost nearly three cents against the Australian dollar, and about three times that much against the New Zealand dollar. And we also lost ground against the Euro, dipping by two Eurocents over the week as a whole.
So we could have had much better results, but the pound really does seem to be struggling at the moment. There are so many negative results and occurrences happening that it seems virtually impossible for the pound to actually pull itself back and become stronger at any point in the near future. It may take some kind of overall recovery in the economy for that to happen – and that isn’t on the horizon just yet.
It gives you a sense of trepidation when we come to see what happened in the previous week though, doesn’t it? You end up fearing the pound has fallen still further, and wondering how that will impact the exchange rates. Most people have set aside any thoughts of a holiday in the near future, but that doesn’t mean we won’t still take a look at how the exchange rates affect the final figures on the currency converter.
So let’s see what happened last week, as we wonder how the pound is holding up at present.
Our first port of call is America, where the US dollar has consistently been taking the upper hand against the British pound. What happened last time, we wonder?
The starting point was 1.4421, after the pound actually managed to exert some authority the week before. Could it make two successful weeks in a row?
Let’s find out. Monday got off to a reasonable start as the pound managed to climb to 1.4587. That’s not a huge advance, but it was enough to make us feel cautiously optimistic that we might just be able to do well for two weeks in a row.
Tuesday progressed in an increasingly positive vein, as the exchange rate finished on a high of 1.4671 for the day. Did this mean we were in for another good week? Could we end up putting a few more cents on the exchange rate for once, instead of taking them off?
As we reached the midweek point, we actually dropped back slightly. Unfortunately by the time the markets closed on Wednesday the pound claimed a slightly lower 1.4599 US dollars per pound. However it could have been a lot worse; things were still reasonably stable and it could still be a good week, even if there were still two days to go.
As it happened, Thursday brought another positive result as we managed to gain slightly once more. This left the pound at 1.4606 by the end of the day. So we were standing in a pretty good position compared to the figure we had started out with; did this mean we were going to gain some ground again for the second week in a row?
Friday’s closing figure was not what we were probably setting ourselves up for, however. By the time the markets closed and everyone headed home for the weekend, it was unfortunately not the pound that was in the lead. The final figure turned out to be 1.4318 – dropping nearly three cents since the day before. And over the week as a whole the difference turned out to be just over a cent. But of course it didn’t go in our favour. So all the hard work we’d put in had been erased in the course of twenty four hours.
On that rather depressing note, we should now move across to see how the pound did against the Euro. We had dropped back by a couple of cents last time, so what happened this time around? We were starting from a lowly 1.0643, so we were anxiously looking to improve on that as soon as possible.
Well the first day certainly started on an encouraging note, as the pound increased its standing to 1.0759. Could this be the start of a good week, or would we end up with a similar overall result as we had seen in the US?
Tuesday brought more good news, as the pound increased its worth against the Euro to 1.0862. This was looking better and better, as the pound moved away from the threat of parity. But Wednesday saw a slight weakness becoming evident, as the exchange rate slipped back to 1.0819. What did the last two days of the week hold?
As things turned out we could have predicted that we’d experience another loss on Thursday. Luckily it wasn’t a huge one, but the pound did still lose some ground and ended on 1.0734. That left one day to see whether the pound could regain some strength, or experience another fall.
And as it happened, it did manage to boost itself up a bit to 1.0770. And that was just enough to secure a reasonable rise over the week as a whole. The total amount gained was 0.0127, and while that may not have been as much as we would have liked, it did still mean we had improved on our position since the week before.
It will be interesting to see whether the Euro weakens somewhat over the coming weeks, and allows the pound to gain some ground. Europe as a whole is having a very tough time during the recession, so in some ways the pound and the Euro are very much in the same boat.
One thing is clear though, and that is the fact that the pound still has a long way to go to regain its former strength. So let’s move on from Europe and see how it did last week in Hong Kong.
It actually had a good week the previous week, so let’s see if we managed to make it two in a row. Last time we left the pound claiming 11.177 Hong Kong dollars, and by the end of Monday that had changed to 11.302, so that was certainly a great start to the week.
But could we keep it up? Tuesday certainly kept things going in the right direction, as the exchange rate crept up still further to 11.370 by the close of play. The midweek point saw a fall though, and by the time trading finished on Wednesday evening the exchange rate stood at 11.315. Did this mean we had already peaked, and it was going to be downhill from here on in?
Thursday’s figure certainly seemed to point to that being exactly the situation. By the end of the day we had slipped back further to 11.225, and we were in danger of ending up with an even lower exchange rate than we had finished on the week before. Even if we didn’t gain a lot this week, could we hang on for long enough to stave off a loss?
Unfortunately the answer would turn out to be no. As Friday – and the week as a whole – came to a close, the exchange rate dropped down to 11.097. That meant we had actually lost ground during the week, losing a total of 0.08 Hong Kong dollars as a whole. Given Monday’s great start it looked like it was going to go in our favour, but as we saw it can change very quickly to reveal a loss over the week as a whole.
Let’s move swiftly on to New Zealand now, where we finished up on 2.5800 previously. That was the final figure of the previous week, which saw a total loss of nearly nine cents. So we were clearly looking to recoup some of that (or preferably all of it) this time around. Could we do it?
Monday’s closing figure certainly wasn’t that encouraging, even if it did only drop by a small amount. By the close of play we were left with an exchange rate against the New Zealand dollar of 2.5755. Tuesday was more positive though, because it went in our favour and left us on 2.5936 by the end of the day. Could we improve on that still further during the remainder of the week?
If we were going to, it wasn’t going to happen on the Wednesday. That’s because we slid back slightly and finished on 2.5801 for the day. And suddenly we had a sinking feeling that perhaps this wasn’t going to be our week either.
And unfortunately we were to be proved correct. But even we were shocked at the extent to which that exchange rate went in favour of the New Zealanders’ on Thursday. By the end of trading the figure had dropped back to 2.5222. And it didn’t get any better on Friday either; the drop on that day wasn’t as bad, but it still fell further to 2.5107.
So that meant we had lost a total of nearly seven cents over the week as a whole. Not good news – especially given the poor performance by the pound the week before as well.
So where does that leave us? We have just one country to go with regard to exchange rates, and that is Australia. We lost ground here too last time, so we were looking for a better performance this week. But would we actually do well here, or would we be in for another drubbing?
Our starting point this time was 2.0952. And there was barely any change on the first day of the trading week, as we finished up on 2.0953. Could we hope for better the next day?
Well we could hope, and we did actually get what we wanted too. The final rate on Tuesday evening was 2.1009 – not a big increase but enough to feel that we might get a better result if we could keep it up.
Unfortunately Wednesday didn’t progress exactly how we would have wanted it to. By the end of the day the exchange rate had dropped to 2.0892, and suddenly it was looking like yet another bad week for the British pound.
The following two days confirmed that, with the pound dropping to 2.0769 Australian dollars on Thursday, followed by 2.0710 on Friday. That equated to a loss of nearly two and a half cents since the previous week. It could have been worse, but we could also have had a much better result too.
So once again, it was not a week to celebrate for the pound. Let’s see how things progress next time.
The US dollar isn’t always as strong as we are prone to believe. But last week it did enjoy a reasonable round of results against many other currencies, including the Euro.
Despite the news strand given above, it wasn’t all roses for the US dollar. The New Zealand dollar rose from 0.5663 on the Monday to 0.5703 on Friday night, although that had dropped back from 0.5790 the day before.
The somewhat troubled Euro didn’t stand up well to the Hong Kong dollar last week. It started by bagging 10.5054 at the close of play on Monday, but that dropped to 10.3041 by the end of the week.
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So here we are at the end of another week – and not an encouraging one either, it has to be said. Will we have better news to report next time? Let’s hope so. We’ll be here as usual to find out.