Posted by Allison on 19 May 2010, 12:23
Welcome back to another of our regular looks at how the British pound is performing on the world stage. If you have had your currency converter close at hand during the past few reports we have issued, you will know the General Election has had a marked effect on how the pound has been coping.
As is customary now, we shall take a brief look at how things finished up at the end of last week, before moving on to see how the first two days of this week started off.
We actually achieved only one good result to finish the week with last time, and that was against the Euro. We know that the European currency is having problems of its own at the moment, and that apparently gave the pound a chance to improve its exchange rate. Here we added on the small amount of 0.0034 over those last three days of last week.
But what happened elsewhere? Well there were big losses in store in many places, including nearly two cents lost against the US dollar. We also saw a drop of 0.151 against the Hong Kong dollar, leaving us on 11.343 at the close of play last week.
Elsewhere we experienced a drop of around a cent against the New Zealand dollar, and finally we topped that by losing over one and a half cents against the Aussie dollar.
So what would this week have in store as the markets opened on Monday morning? Let’s find out now.
Our opening rate against the US dollar this time around was 1.4574, but we didn’t get the good positive start to the week we wanted. By the close of play on Monday evening we had fallen to 1.4436, leaving us wondering if in fact this week could turn out to be worse than last week. Perhaps the coalition government is making investors nervous?
Whatever the story may be, by Tuesday evening we had rallied slightly and left the pound on 1.4468. This added up to a total loss of just over a cent, but added to the couple of cents we had lost at the close of last week, it makes us question where we will go from here.
Next up we have the Euro – the only currency we had a good result against at the end of last week. The starting point here was 1.1667, and things were looking good at the end of Monday evening as we found ourselves on an exchange rate of 1.1690.
Unfortunately we then went in the opposite direction the following day. We dipped down below the point we had started at, giving us a figure of 1.1642 and a loss of a quarter of a Euro cent so far. Perhaps things will pick up again towards the end of the week.
Moving on, we stop at the Hong Kong dollar next. But unfortunately the closing rate from last week of 11.343 was soon eroded down to 11.260 by Monday night. Given the pattern we have seen so far from the other two currencies, we could reasonably expect another loss here as well.
And indeed that is what we got – with a closing rate on Tuesday of 11.278 and a total loss for the two days that amounted to 0.065.
Moving on swiftly we now take a look at the New Zealand dollar. The opening rate here was 2.0501, so we were hoping to improve on that fairly rapidly if we could. Although having seen the results thus far, the odds of that are probably fairly long.
We did set off in the right direction on Monday as we ended the day on 2.0597. But if we were expecting a drop back again the following day we didn’t actually get it this time. Instead we ended up on 2.0614 – not exactly a huge result but a good one nonetheless, and one that gave us an improvement of just over a cent.
Finally we stop off in Australia to see if we could pull off a similar result there. Sometimes we see similar results between New Zealand and Australia, so hopefully that would pan out to be true this time around.
Our opening rate here was 1.6351, and by Monday evening we had managed to garner a reasonable improvement, pushing the rate up to 1.6416 in the process. And we also continued this trend the following day, as the pound pushed further and claimed a closing rate of 1.6506. This gave us a two day increase of just over a cent and a half – which was the best way we could have hoped to end this report.
The US dollar managed to climb from 0.8005 to 0.8046 as the first two days of the week got underway, leaving the Euro firmly on the back foot.
A starting rate of 1.0272 went up to 1.0358 the following day. But by Tuesday evening the Canadian dollar had fought back and redressed the balance to 1.0267.
The US dollar started the week on 1.1223 against the Swiss franc, but two days later it had managed to climb to 1.1287. It had achieved an even better figure on the Monday evening, but failed to capitalise on it.
Perhaps one of the most notable reports from the last couple of days is that which concerns the Euro. Some commentators have gone as far as saying they believe the European single currency is on its last legs. Whatever the truth of the situation turns out to be, this story from Reuters - indicates the severe problems the region is facing.
So here we are at the end of another currency report. Let’s hope the week ends on a more positive note for the British pound than it began – we’ll be back soon to let you know how things pan out.