Posted by Allison on 10 January 2017, 12:54
So, we have said goodbye to 2016 and now we have a New Year to get our teeth into. It began at the start of this new week, too, with New Year’s Day falling on the Sunday. Would this New Year start well or badly for the British pound?
As the New Year got underway, the pound began on 1.2311 against the US dollar. This dropped to 1.2291 on Monday, and dropped further still to 1.2280 on Tuesday. Not the best start, that much was certain, but what did the rest of this first week in 2017 have in store? The good news was that things improved from there, with three encouraging trading days to finish the week in style. It also meant that by Friday evening, the British pound was settled on a higher rate of 1.2363, so it was indeed a good start.
Could it replicate that against the euro? Well, the pound began trading on 1.1679 here, before rising over the course of two days to reach 1.1825 on Tuesday evening. We couldn’t have hoped for a better start. However, this currency brought with it the exact opposite of the pattern we’d seen against the dollar. That meant the final three days saw a series of falls for the pound. By the time Friday evening arrived, the British pound had fallen to a week-long low of 1.1675.
Our third stop is with the Hong Kong dollar. We began on 9.5483 here and as we suspected, the pattern followed that shown against the US dollar. Two poor days started the week, with a fall to 9.5256 by Tuesday evening. We then had three much healthier days and that meant rising to 9.5881 by Friday – and the highest rate the week had in store, too.
So, would that established pattern against dollar currencies be seen once again in New Zealand as well? It would, and though we began on 1.7704, we rose steadily to 1.7756 by Tuesday evening. This was when the drop we’d seen elsewhere came into force once again. We ended up falling considerably throughout those next three days. This meant the British pound was on a disappointing 1.7598 by Friday evening.
With just one more currency to go – and a dollar currency again at that – it seemed certain we would experience another disappointing start to the year against the Australian dollar. Would this pan out? Not quite – actually, it was worse. We opened the New Year trading on 1.7047 before rising to 1.7117 on Monday evening. But although we had achieved other good results on Tuesday against other dollar currencies, it would not be the case here. Instead, we fell steadily over the next four days, finally stalling on 1.6851 on Friday evening.
Here too we ended up falling from our opening rate of 1.6571. In this case, we finished on 1.6391 against the Canadian currency.
The pattern was not quite as bad against this European currency. Instead of experiencing a heavy fall against the Swiss currency, we only dropped from 1.2542 to 1.2522 this week.
From a starting point of 138.974, we went up and down throughout several days this week before finally finishing on 140.484.
So, we can see this was not the best start to the year, although it could have been much worse. The British pound has begun 2017, and perhaps we should expect further challenges as the year progresses. Until Brexit begins formally around March time, it is impossible to say what might be in store for the pound next. We shall be watching closely to see how it reacts to events in the news as we progress through the early weeks of the New Year. Perhaps 2017 will be another year to remember.