Posted by Allison on 22 October 2018, 14:18
The British pound has had a couple of reasonably good weeks recently on the currency markets. So, will this continue that trend, or will we see something very different in play?
The British pound began the week on 1.3206 against the US dollar, dipping to 1.3153 by the end of the first day of trading. That didn’t bode well, but it rebounded to reach 1.3228 by Tuesday evening. Unfortunately, the remainder of the week gave us a very different picture. Three falls were to follow, which left the pound sitting at 1.3031 by the end of the week. That meant we’d lost nearly two cents – quite a drop over just five days.
It’s not unusual to see some ups and downs against the euro, especially given the stage we are at with the Brexit negotiations. This week was a classic example of this. We began on 1.1410 before diving to 1.1357 on Monday night. Next day, we were back to 1.1416. Then we dropped to 1.1370 before rising to 1.1383 by Thursday evening. The ups and downs ended with another drop on Friday, this time taking us to 1.1361. We get the feeling it could have been a lot worse.
The Hong Kong dollar got the better of the British pound to begin the week too. Dipping from 10.348 to 10.309 by Monday night, it didn’t bode well for the week ahead. While we rose to 10.366 by Tuesday evening, the rest of the way was all downhill for the pound. That’s as it had been against the US dollar, and in this part of the world it meant we dropped to 10.215 by Friday evening.
So, we have three losses on the board thus far. Can we expect two more against the New Zealand and Australian dollars as well? The pattern certainly didn’t look promising against the Kiwi dollar. We opened the week on 2.0273, dipping to 2.0129 by Monday night. Unfortunately, it was all downhill from there. By Friday, we had fallen to an unimaginable 1.9744. That’s a loss of over five cents in five days.
Would we experience the same against the Australian dollar too? The picture wasn’t quite the same, although there were similarities. We started trading on 1.8525 and fell to 1.8434 by Monday night. We did manage to recoup some losses the following day though, rising to 1.8543 as we did so. But then the familiar drop set in, giving us three losses in a row to take us to Friday night. That was when we settled at 1.8251.
This was perhaps to be expected by now. The pound continued to dip here, falling from 1.7177 to reach 1.6981 by Friday evening.
This week was such that we could celebrate a minor loss against a major currency, purely for the fact it could have been worse. That was the case against the Swiss franc, where we dropped from 1.3087 to 1.2975 this week.
Here, we began on 153.354 before rising to 156.006 by Wednesday night. Sadly, that was soon left behind as we lost ground over the whole week, falling to 152.806.
This was not a week that would be remembered for positive reasons. We were hoping to achieve another good week, but perhaps there has been too much good news of late and no dips to speak of. Those dips arrived in force for the British pound this time around, making it difficult to see where we could go from here. Will next week prove to be just as problematic, or will the pound bounce back and regain its strength after a disappointing week?
We do not know the answers, but rest assured we will share them with you as soon as we have them.