Troublesome Times on the Currency Markets

Posted by Allison on 17 August 2015, 20:02

An overview of the currency markets for August 3rd – August 7th 2015

It’s hard to believe yet another month is upon us. Yet here we are, racing through 2015 and it’s time to see whether the British pound could make a good start to August. It began on 1.5575 against the US dollar this week and had a subtly-good first day as it rose to 1.5581. The second day was even better as the pound reached a high of 1.5614. Day three was better still as the closing rate edged up to 1.5629. That was about as good as things would get though. By the time Friday night came around the pound was lower on 1.5516 – lower than Monday’s opener had been.

Would we see a similar picture against the euro? Well, the pound began trading on 1.4202 before rising over the first three days and reaching 1.4361 by Wednesday evening. And once again, just as we had seen against the dollar, we fell over the final two days of the week. Here too we ended up worse off compared to that opening rate. We finished up with a disappointing rate of 1.4182 by Friday night.

By now we were wondering whether the same pattern would be replicated against the Hong Kong dollar, not to mention the two other dollars we have yet to look at. We opened trading on 12.076 here and rose to 12.080 on day one. Then came two more good days, exactly mirroring the pattern we’d seen against the US dollar and the euro thus far. This took us to 12.119 on Wednesday night. From here we should have had two poor days to finish off – and that’s exactly what happened. We ended up closing out the week on 12.028 against the Hong Kong dollar, which once again was worse than Monday’s opener.

On to the New Zealand dollar now, where the pound began the week on 2.3816. Here the pattern was changed though, because by Monday night the pound had dropped to 2.3645. It was a welcome relief then when this was followed by two good days. We managed to climb back to 2.3899 by Wednesday evening. Perhaps predictably though, we ended up going back to 2.3609 by Friday night, sending us back down with a loss for the week as a whole.

One last stop to make now as we see whether the pound could do any better against the Australian dollar. Here the pound suffered a loss to start the week, reducing it from 2.1502 to open proceedings, to 2.1444 by Monday night. It fell further to 2.1104 by Tuesday, and even a slight rise on Wednesday didn’t help. In the end it fell further throughout the remainder of the week. By Friday night the pound was in a sorry state on 2.1002 – five cents lower than its opening rate on Monday had been.

Notable events in the world of currency

A slight drop for the pound versus the Canadian dollar

We fell back here too, falling from 2.0323 to 2.0299 throughout the week.

Better news against the Swiss franc

We had to get some good news somewhere, and it came against the Swiss currency. The pound began the week on 1.5004 and finished it on 1.5229.

Another drop against the Icelandic krona

It couldn’t be good news everywhere this week and we had another drop against the krona too. Here we started on 209.346 and finished on 208.410.

Well we had a real mix of fortunes this week, and for the most part they didn’t end up going our way. In fact in some instances we had some significant losses. It was often only the good start to the week that prevented it from becoming even worse partway through.

We shall wait and see whether there is any better news next week, but until then we have to accept this week’s poor results for what they were. It would be unpleasant to have two weeks like this in a row though.