Posted by Allison on 5 May 2010, 13:56
So here we are breaking into another brand new month, and with the General Election looming can the pound pull off a good performance or will it remain largely in the doldrums?
We’ll find out how well it did on the first two trading days of the month in just a moment. But first let’s have a quick recap on how it ended the month of April. In actual fact it couldn’t ended much worse than it did, with losses against every single one of the main five currencies.
The amount we lost against the US dollar was quite small in actual fact, amounting to just 0.0028 of a cent. But we lost slightly more than that against the Euro, with half a cent going missing there.
Elsewhere we had the Hong Kong dollar to go up against, and the loss there amounted to 0.022 with a final exchange rate for the week of 11.877. But the worst results were saved for the other side of the world entirely.
After a horrendous start to the week for the New Zealand dollar, we lost out on another three cents on the last three days of the week. And we also lost nearly two cents against the Aussie dollar, making this one of the worst weeks we have seen in a while.
So let’s hope that the bad end to April gave way to a good start in May, shall we?
Here we go with our starting point for the new month, which as always settles on the British pound’s performance against the US dollar. Here our starting rate was 1.5299, and anything above this would be welcome for starters.
Unfortunately for us the initial direction we went in was down. We didn’t lose too much ground but it was enough to make us wonder where the rest of the week was going. By the end of Monday we had a figure of 1.5251 showing on the currency converter.
Could Tuesday bring any better news? Once again the answer was no, because the closing figure for the British pound versus the US dollar that day was down to 1.5162. This meant we had lost out on nearly a cent and a half in the first couple of days.
Let’s move on to the Euro now in the hope that we can find some better news there. The European currency is having a few problems of its own right now, so can we take advantage of this and move up from the closing rate of 1.1490 we had to finish April with?
Luckily we did seem to be getting better news here, with an improved rate of 1.1520 by the close of play on Monday night. And Tuesday made things look even better, with that figure going up to 1.1584. This meant we had achieved a good increase of nearly a whole Euro cent here at least.
Let’s move across to Hong Kong now to see if we could improve on the closing rate we finished up with there last month. This time we had to try and improve on 11.877, after losing out on 0.022 on the last three days of last month.
Unfortunately the trend here was firmly downhill as well, with the rate on Monday night dropping to 11.839. This seemed to be following the negative pattern of the US dollar, and indeed this was borne out by the 11.772 exchange rate we had by Tuesday evening. So here we’d lost another 0.105 to kick off the month of May.
But could we do any better in New Zealand? We’d had significant losses here during the last week of April, so it was imperative that the British pound should try and replace them now and push the exchange rate back up again from 2.0974 where it had settled.
But there was yet another dip in store when the rate for Monday night fell to 2.0898. We did at least manage to start trying to rectify things the following day by pushing the rate back up to 2.0903, but it still resulted in a loss of 0.0071 to start the week. Perhaps this is the first sign of a recovery though?
Finally we have the Aussie dollar to look at. We finished April on a figure of 1.6421 here, and by the time Monday night rolled around after the first trading day in May, we’d landed on 1.6461 instead. And by the end of the following day we were on 1.6557 – meaning that here at least we could celebrate an increase of 0.0136 for the start of the month.
It wasn’t all bad news to start the month with for the pound. It climbed from 1.5372 to 1.5440 against the Canadian dollar.
It wasn’t all good news elsewhere though as the pound dropped from 67.859 to 67.634 against the Indian rupee.
We started the week on 195.177 against the Icelandic currency, but by the time two trading days had gone by we had reduced that to just 194.799.
There has been plenty of news surrounding sterling’s failure to perform well in the run up to the election in the UK. Here is another report from Reuters - on the failure of the pound to make headway against the US dollar.
So it has hardly been a successful start to the month of May for the British pound. With that said though there is every chance that once the election is over we will see better results. The only exception to this could be a hung parliament, but until every last vote is counted we have no way of knowing whether the pound will rebound or not.