The Losses Keep Coming for the British Pound

Posted by Allison on 3 December 2018, 16:51

Here we are with our latest report on the British pound’s performance against several other major currencies. How did it do this week?

An overview of the currency markets for November 26th – November 30th, 2018

An exchange rate of 1.2830 provided the starting point for trading against the US dollar this week. While we enjoyed a slight rise to 1.2848 to start with, this was soon replaced by a loss on Tuesday that took us down to 1.2764. As it turned out, the slight rise that followed the day after that was not enough to stave off two losses to end the week. It was clearly not a good week for the British pound, eventually dropping to 1.2753 against the US dollar.

Could it do better against the euro? It seemed unlikely, especially given the uncertainty surrounding the Brexit deal. Opening on 1.1301 on Monday, the pound did manage to creep ahead to 1.1307 by the end of the day. However, we then fell to 1.1267 the day after. As the week progressed, it became clear that while we did have a couple of successes, it would not be enough to lead to a good result in the end. Indeed, we dipped to 1.1218 on Thursday, and while we then rose slightly to finish the week on 1.1227, this was still lower than we’d started out on.

Could we expect more of the same against the Hong Kong dollar as well? It seems likely this could occur. Our opening exchange rate was 10.040, and while this climbed to 10.052 on Monday night, there was only one more rise throughout the remainder of the week. Even that was little to celebrate. We fell to 9.992 on Tuesday and managed to recover to 10.009 the following day. From then on, we had two disappointing days in a row. That meant we finished the week in poor shape on just 9.975. Was this a sign of how the pound might progress in the coming weeks?

We were half expecting another disappointment against the New Zealand dollar as well. Perhaps that is why we were not too surprised when that turned out to be the case. Our opening rate here was 1.8927, dipping steadily over the first two days to reach 1.8757 by Tuesday night. Our one rise occurred the following day, taking us to 1.8826 on Wednesday. Since that was our only piece of good news (and even then, it only stalled the losses), we braced ourselves for the bad news Friday would bring. By then, we were sitting on 1.8588 – quite the drop from earlier in the week.

Given this collection of losses, it seemed unlikely anything else would happen against the Australian dollar. Unfortunately, we were correct in thinking that. Opening here on 1.7753, the British pound had the same two disappointing days to start with, taking it to 1.7612 by Tuesday evening. This improved to 1.7672 the following day, before another noticeable fall occurred on Thursday. That meant we were on 1.7417 by Thursday night. While we clawed back some losses to finish the week on 1.7475, this was still far lower than we had hoped.


Notable events in the world of currency

Only a slight drop against the Canadian dollar

A drop, nonetheless, but the marginal fall from 1.6974 to 1.6971 was a relief to some.


A similar result against the Swiss franc

Here, too, it could have been worse, as the pound fell from 1.2789 to 1.2731 this week.


A bigger drop against the Icelandic krona

The pound experienced a larger fall here, going from 158.679 to 156.509 this week.


So, another week that was far from memorable for the British pound. Perhaps we can hope for a better performance next week, although that too seems too much to hope for. We shall be watching closely to see what happens next, as we determine whether the pound can improve on these few uncertain weeks.