Posted by Allison on 3 June 2009, 09:57
If you read the report we gave you last week, you will know that the British pound had a very good week indeed. We had almost got used to having weeks where we were reporting bad news, but suddenly we weren’t doing that any more. Instead we were giving you great news about the sudden resurgence of the pound – because that is what we seem to be seeing here.
Last time we saw the British pound excel against four out of the five main currencies that we look at each week. The only one that we didn’t manage to increase the standing against was the New Zealand dollar. But when it came to the Euro – and the US dollar especially – we did very well. The question now is whether we can continue that.
We’ve seen in the past that occasionally we get a good week, but then the next week will see the pound erasing out all that good work. There must be countless people who have looked at their currency converter and thought they were in for a reasonably good deal, only to find that things soon swing back the other way again.
But we seem to be on a different track at the moment. Could it be that we are beginning to see a longer fight back for the pound? Could it be that the kind of figures and exchange rates we are looking at are going to get better and better as we go along?
Let’s hope so, but at any rate it will be interesting to see how the pound did last week, in the final week of May. Shall we get started?
The previous week was a sterling one in every way for the British pound when it went head to head against the US dollar. By the time the week was over we had finished up on 1.5911 – having added a phenomenal seven cents and then some to the exchange rate.
But was this just a flash in the pan, albeit a very welcome one? Or would it be repeated this week as well.
Let’s see what happened. Monday started off with very little going on as it happened. By the end of the day the exchange rate had settled on 1.5915, so there had only been a slight increase in our fortunes.
So was this going to lead to a week of anti-climaxes, or was there better news in store?
Anti-climaxes seemed to be on the cards as far as we could tell the following day, because the exchange rate actually went down a little to 1.5876. It almost seemed as if we would be losing all the good ground we had made up the previous week.
And so we came to Wednesday and the midweek point, and fortunately there seemed to be better news at that stage. By the time the markets closed for the day the rate had edged up slightly in favour of the British pound. The final rate for the day was actually 1.5967. Now that is only 0.0056 up on where we had finished the previous week, but at least we were starting to make some ground.
Unfortunately Thursday brought another step backwards. This seemed to be the pattern of the week as a whole – very much one of ups and downs. And this didn’t change on Thursday as the closing rate for the day ended up on 1.5926. Would we end up losing ground this week in the end, or could we pull off a nice increase on the last day of the week? Wouldn’t it be good if it was the latter, since we could do with another good week this week?
Well as it happened we did get what we wanted, and given the results we have seen on the first four days of the week it was rather better than we thought it might be. The final exchange rate that was achieved by the time everyone headed home for the weekend was 1.6150. That meant we had once again made a gain against the US dollar. It wasn’t as much as the previous week, although that would probably be a little too much to hope for. But we did still gain well over two cents – 0.0239 to be exact – so it was a good week all in all.
So next up as per usual we visit the territory occupied by the Euro. The pound often comes off slightly the worse for wear against the Euro, but we gained one and a half cents last time around. We could indeed be looking at a similar gain this time too. At least, let’s hope so.
Let’s take a look at what actually happened. Our starting point here was 1.1388, so we were looking to get out of the blocks pretty quickly here if we could. We didn’t quite manage that on the Monday though, because we ended up slightly lower on 1.1359. Did this bode poorly for the rest of the week to come?
Luckily Tuesday was much better and we saw an increase in our fortunes on that day. We ended up on 1.1415 by the close of play, so that was something to be glad about. The question now was whether we could keep that forward – and upward – momentum going.
The midweek point seemed to indicate that we could be in for a positive answer here. By the time everyone packed up and went home for the night, the British pound was poised on 1.1486, giving us cause to be hopeful that we could finish the week in a better position than when we started.
And once again Thursday saw us creep up ever so slightly once again. These gains weren’t exactly huge, but each one is heading in the right direction as far as we were concerned. And now we were looking at a figure of 1.1494 at closing time, with just one day to go until the end of the week.
Unfortunately that is where we tripped ourselves up. Not too much thankfully, but we did trip up and end up losing some ground at the last minute, leaving us on 1.1456 as the weekend got underway. This meant that overall we had still added some value to the figure we started with, even if it was only by 0.0068 in total.
So with two pretty good results under our belts so far, let’s proceed to the third stop on our global tour, in Hong Kong.
We did really well here last time, and finished up on an impressive 12.334 by the time the week came to a close. If we could do just as well this time around, we’d be delighted.
So far this has been a week of tiny movements on day one, and Hong Kong was to be no exception to what was becoming a rule. The final exchange rate on day one against the Hong Kong dollar was 12.336, giving us just a tiny margin of improvement to begin with.
Tuesday’s tussle didn’t go in our favour though, as we finished up slightly lower at 12.306 by the close of play. Did this mean we would end up losing ground over the week as a whole? Or could we pull things back and finish up in a better position?
Wednesday was certainly more encouraging and we did finish up on 12.378 eventually. But as we have seen so many times before this week, we’re getting used to seeing small ups and small downs during these particular five days. It didn’t seem that unusual to see them here too, and it certainly didn’t seem likely that we would see any huge gains like we saw against the US dollar last week.
Thursday brought another somewhat predictable drop in the exchange rate, as it slid back to 12.347. But with one day still to go, there was still time to make up some ground.
And that is exactly what we did. We ended up on a truly impressive 12.518 as we crossed the finish line this time around. That equated to another good result for the British pound, as we had managed to add a solid 0.184 to our exchange rate with the Hong Kong dollar.
So with three good results under our belt, it’s time to head across to New Zealand – which is precisely where we came unstuck last time. We finished up a cent and a half down against the Kiwi dollar last time, with a finishing exchange rate of 2.5686. Could we do better this week?
Well Monday certainly got us off to a good start, as we managed to creep up to 2.5732. Not a huge gain, but at least we were headed in the right direction. The next day brought some more good news, as we ended up going over into 2.58 territory. By the close of play we were on 2.5824. Was this going to be a week of gains all round, we wondered?
Unfortunately the answer was no, because the very next day – the midweek point in trading – closed with an exchange rate between the British pound and the Kiwi dollar of 2.5845. And unluckily for us there was worse to come. We had come off worst against the New Zealand dollar last week, but this week was going to prove to be worse still. The final exchange rate was 2.5543 on Thursday – and we still had one day to go. Somehow the feeling wasn’t good that we would be able to pull back on Friday.
And we didn’t. In fact we fell further, to 2.5358. That equates to a loss of over three cents for the whole week. It’s clear the Kiwi dollar is firmly in charge over the British pound at the moment.
So finally we come to our last global stop in Australia. We’d managed to win over the Aussie dollar the previous week, ending up on 2.0307 at the week’s end. Could we do better here?
Monday certainly went in the right direction, as we ended up on 2.0361 at the day’s end. But things were looking even more promising the next day, as we ended up on 2.0489. Was this going to be a better result than we’d seen in New Zealand?
Well it almost looked as if the rot was starting on Wednesday, as we finished on 2.0414 for the day. And the following day didn’t get any better either, so it didn’t leave us feeling stronger at all. Thursday saw us finish on 2.0405. But there was an even bigger fall in store at the end of the week, with a drop to 2.0244 by the close of play on Friday.
That meant we had lost ground here too this time around, although it was barely over half a cent in total. That at least meant the rot was minimal.
So it was an interesting week all in all. We had hoped for better, but at least we’d done well in some quarters – particularly against the US dollar.
It seems the pound wasn’t the only currency to have a bad week against the Australian dollar. The Euro didn’t do well either. From a rate of 1.7924 on the 25th, it fell to 1.7671 on Friday at close of play.
The Euro was picking up 1.4010 US dollars by the close of play on Monday, but that fell to 1.3856 by the end of Thursday. Fortunately it rallied to finish on 1.4098 on Friday – slightly up overall.
That pattern of a better rate being followed by a dip on Thursday happened for the yen up against the Hong Kong dollar as well. It ended on a better rate at 0.0808.
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So there we have it for another week. Perhaps it was not as encouraging as we had hoped for, but all in all not a bad performance by the British pound. What will be in store for us next time?