Will the New Year Start with a Bang or with a Whimper for the British Pound?

Posted by Allison on 13 January 2018, 02:28

Welcome back to the first currency report for 2018. It will be interesting to see whether this is a positive or negative report for the British currency.

An overview of the currency markets for January 1st – January 5th, 2018

Well, we were all set for a mixed bag of results this week as the New Year gets underway. The pound began trading on Tuesday morning on 1.3517, and three good days out of four meant we finished in better shape than we started. While the overall picture was positive, the upward motion was mild. The pound managed to add on 0.0034 overall, taking it to a closing rate of 1.3551 on Friday 5th January.

Any good result is something to celebrate, as we have seen already this week, but could we expect anything good to happen against the euro? The pound started trading on 1.1271 this week (and indeed this year), and we saw a mix of rises and falls this week which meant it was hard to keep track of our progress. However, while we achieved a high point of 1.1281 on Wednesday this week, we dropped to close on 1.1250 overall by Friday night.

Moving on, the picture against the Hong Kong dollar looked marginally more promising. We opened on 10.563 here, before rising to 10.603 by Wednesday night. However, a fall to 10.585 on Thursday took away some of the good news. We did manage to rise again to close a positive week overall, as the pound finished in a better position on 10.596.

There is often uncertainty surrounding many currencies, but we never quite know what to expect against the New Zealand dollar – even if the pound has done well elsewhere. The opening rate for the year of 1.8991 peaked at 1.9113 on Wednesday night after two strong days of trading. However, these were promptly followed by two falls, which meant Friday did not end well for the pound. Instead of celebrating a good rise, we were pondering an overall fall to 1.8942.

The picture against the Australian dollar was not identical to that of the Kiwi dollar. We had a rise on day one, as the opening rate of 1.7296 was boosted to 1.7327. However, two falls then followed on Wednesday and Thursday, taking the British currency back to a disappointing 1.7281. While there was room for a slight improvement on Friday, it really was slight – leading to a closing rate of 1.7282.


Notable events in the world of currency

A marginal improvement against the Canadian dollar

We’d say any improvement is a good one, and that’s true of the slight rise against the Canadian dollar, too. The pound took its exchange rate from 1.6950 on January 1st to 1.6952 by the end of the week.


Good news against the Swiss franc, too

Here too there was great news to see – and a better improvement than we’d seen against the Canadian dollar, too. We improved from 1.3189 to 1.3227 against the Swiss currency this week.


A seesaw arrangement against the Icelandic krona

It was hard to follow the ups and downs here, but we managed to do so, and things did improve overall for the pound, too. From an opening rate of 140.684, the pound rose to finish the first week of 2018 on 140.740.


So, we had some good news this week, if perhaps no real successes on a big scale. We were expecting some tough head-to-heads too, especially against the euro, and we were not surprised we saw exactly that. It is hard to say how things will progress through 2018, but we would hope for a reasonably solid January if possible. Whether or not that happens remains to be seen. We shall report back next week with the first full week of results for this year. We can only hope for great news if possible for the pound, but we should bear in mind we could report something entirely different.