Posted by Allison on 24 March 2009, 10:23
Has another week gone by already? Indeed it has, and after the results we saw in last week's report we are hoping to have better news to share with you this time around.
As you will know if you have read this report for some time now, we compare the performance of the pound against five major currencies each week. These are the US dollar, the Euro, the Hong Kong dollar, and the Australian and New Zealand dollars.
And in our last report, we saw that the pound fell against every one of these currencies. That isn't good news for anyone wanting to visit any of these countries – you can postpone your use of a currency converter until a later date, it seems.
But have things got better or worse this week? The pound certainly isn't the strongest of all the currencies on the market at the moment, but surely it couldn't get too bad – could it? After all we are all struggling in the same boat at the moment. Many countries are picking their way through the problems caused by the recession, and that means we are likely to see this same situation continuing for some time yet.
So let's take a look at what the week of the 2nd – 8th March had to tell us, as the currency markets went through another spate of ups and downs.
So let's start as per usual with the US dollar, and how the pound coped against the mighty American currency. The closing figure of the week before was not good, since it had dropped to 1.4157. Remember those experts who were predicting a pound worth $1.25 a few months back? A pound worth $1.50 seemed unlikely then. But just take a look where we are now.
So what happened last week?
Well the pound didn't get off to a cracking start, because by the end of Monday the exchange rate was down to 1.4100. It was only a small slide though, so hopefully the rest of the week will pan out better.
Unfortunately for us, Tuesday didn't head in the right direction. By the close of play on that day the pound had lost more ground, leaving it standing at 1.4083. It's not much of a loss compared to how badly the pound has performed on some occasions, but being right at the lowest end of the $1.40s doesn't look good at all.
So what did the mid-week point bring?
Thankfully the answer was a small increase. It was very small, but better than nothing. The final figure on that day was 1.4103 – meaning we'd gained a miniscule 0.002 since the previous day.
Thursday seemed to confirm that this was going to be a week of small gains and losses. The final figure on that day turned out to be 1.4101 – meaning we had lost 0.0002 in twenty four hours. And with one more day to go in the week as a whole, what would we end up with as a final exchange rate? Would the small changes still be in force, leaving the pound on pretty much the same footing as the previous week? Or would we end up with a big swing going one way or the other?
The answer wasn't long in coming, and thankfully it went in our favour. By the close of play on Friday night, the final exchange rate for the week between the British pound and the US dollar was 1.4222. So it wasn't a week of huge jumps one way or the other, but we had managed to gain a little bit at least. The difference was 0.0065 all in all.
It seems strange to be relieved at gaining such a tiny amount, but given the losses we have experienced lately we have to take the gains wherever we can.
So with that in mind let's recap on what happened against the Euro last week. The final exchange rate in Euroland last week was 1.1196, after losing some one and a half cents over the week as a whole. So could we get some of that loss back this time around – or at least register some kind of improvement, much as we had done in America?
There was actually very little movement at all on Monday. By the time everyone headed home for the day the pound stood at 1.1194 against the Euro – just 0.0002 down on the finishing figure of the week before. And we ended up losing some ground the following day too, which wasn't too good since it seemed like we were on a downward spiral once again. The closing figure on that Tuesday was 1.1163.
Wednesday brought better news though. Just as we were almost braced for a slow decline in the exchange rate between the pound and the Euro, we were given a final figure of 1.1233 for the day. That equated to an increase of 0.007 over the course of twenty four hours. Once again, not a huge amount but at least we were headed in the right direction. We might even be able to push further ahead during the second half of the week perhaps?
Well we didn't end up pushing ahead on Thursday, although the difference between the figures on the two days was so small that you may not even have noticed it. By the close of play on Thursday the final exchange rate for the day was 1.1232.
So we were left with just one day to go, and we were now hoping that Friday would bring a slightly more noticeable jump up as we had seen in the US. But while we did indeed get some improvement it wasn't as much as we would have liked. The final figure on the last day of the week was recorded as 1.1235 – giving us an increase of 0.0003 on that last day. That meant the week as a whole had seen the pound increase its standing against the Euro by 0.0039. Not as much as we'd hoped for, but an increase just the same.
So it's across the waters to Hong Kong now, where we were left with an exchange rate of 10.978 last week. Would we see another week of small improvements here too, we wonder?
Once again Monday gave us a slight drop to 10.937, and Tuesday wasn't any better. But given the pattern that had been developing against the other main currencies so far, it didn't seem so unusual to see it happening in Hong Kong as well. Tuesday's figure was 10.925, just another slight drop to see.
Things started to pick up on Wednesday though, as the exchange rate picked up again to 10.943. The question now was not so much what would happen on the following day, but what would happen on Friday. As the previous results this week have shown us, this is the day when we have seen another jump in the figures. Would we see that here as well?
Thursday's exchange rate registered an almost imperceptible drop to 10.940 – a difference of just 0.003 overall. And finally Friday was upon us, and that was when we got the increase we were hoping for. The exchange rate finally made the jump we wanted, and it managed to get over the 11.0 barrier as well. The final rate was recorded at 11.030 – meaning that we had gained 0.052 overall across the week. That's three out of five increases so far, but could we make it five out of five once we had seen the figures from New Zealand and Australia?
Let's see what happened in New Zealand first. We lost a tiny amount here last time, and were left with an exchange rate of 2.8300. The good news was that by the close of play on Monday, that figure had risen to 2.8558. Now as you know if you have been a regular reader of these reports, the exchange rate against New Zealand quite often doesn't follow the pattern of that in other countries. So what could we expect now after that increase?
As it was, we should have braced ourselves for a big drop – because that is exactly what we got on Tuesday. By the end of the day the exchange rate had gone down to 2.8247. It seemed to be in something of a freefall from then on, as Wednesday's exchange rate dropped further to 2.8173. That left two days to go and we were now simply hoping to see an increase after the bad start we'd had.
Unfortunately we didn't get it on Thursday, as we slid a bit further down to 2.8153. Could we actually reverse this fall at all and hope for some kind of good news to end the week on?
As it happened we could. By the time the markets closed on Friday we had managed to pull back some ground and grab a final figure of 2.8240. That still meant we had lost ground over the week as a whole though, although it did limit the damage. The final loss was tallied at 0.006.
So finally we move on to Australia, where we claimed 2.2271 Australian dollars to the pound last week. What could we do here this time around?
Well we were back into the realm of small drops on Monday. By the end of the day the final figure we had was 2.2242. Unfortunately there was a bigger drop to come on Tuesday, as the pound sank down to 2.1902. That meant we'd lost 0.034 overnight.
Wednesday brought a slight change in our favour, as the exchange rate perked up to 2.1983. And again an almost imperceptible increase to 2.1984 was the result on Thursday, as we got four fifths of the way through the week. What would the final day bring us? Would we end up losing ground once more, or could we hope to make up for our falls and level the ground again? It seemed too much to ask for to hope for a big jump.
But in fact we did get quite a significant jump on that last day. The final exchange rate for the week was 2.2228, meaning we had gained an impressive 0.0244 overnight. Over the course of the week as a whole though, we had lost a total of 0.0043.
So in the end we lost ground on every one of those five currencies. Let's hope that we have better news to report next week.
New Zealand had a good week against the Euro last week. It started off on 0.3919, but by the time the markets closed on Friday night it had improved its standing to 0.3978. That may not seem like much, but we have to take the gains where we can get them at the moment.
If the current discussions are anything to go by, the answer could be yes. Things are tough everywhere at the moment, and that has prompted the idea that joining the Euro could be done faster. That means Poland might be using the Euro sooner than previously expected.
The troubles of inflation in Zimbabwe are shown in the figures for exchange rates between the Euro and Zimbabwe last week.
On Monday the Euro was claiming 120.190 Zimbabwean dollars, and on Friday that had increased to 143.187. Such huge jumps are to be expected, and there may be many more to come yet.
So there we have it for another week. Will the pound pull back some good results and fight back more next week, or will we be reporting on yet more slides in the rates?
We'll see you here to find out.