Welcome back to our weekly round up of results from the world of currency, where it's time again to see how the pound has been doing when it goes up against all kinds of other currencies from all over the world. It had a pretty good week last week, so it will be interesting to see whether the last few days have proved to continue that trend, or whether things have gone downhill.
As July turned into August, did we have much to celebrate… or did things look bad for the pound? Let's find out.
An overview of the currency markets for July 28th – August 3rd
Last week was another good one as the pound stood up to the US dollar and more than held its own, so we were looking to the end of July to see whether things would continue in that vein or whether they would start to go in the opposite direction.
The notable event of last week was that the pound managed to claim just over two dollars per pound at one point, but it was a brief event that you would have missed if you weren't paying attention. July 28th didn't look as though we were heading in the right direction to repeat the feat though, as we ended that day with an exchange rate of 1.9868 US dollars to the pound. Those people waiting to go on holiday to America would have been tentatively tapping away some figures on their currency converter to see how far their money would have gone at that point… and whether they should wait to see if things got marginally better.
They did get slightly better the next day, as the pound finished by claiming 1.9886 dollars for every pound exchanged, but it still looked a long way from reclaiming that $2 territory again. Wednesday didn't help matters as the exchange rate started to turn in favour of the US dollar, finishing at 1.9815 for the day.
Thursday made it clear that the tide may indeed be starting to turn, as the exchange rate dropped further and the weakening pound could claim an exchange rate of just 1.9787 against US dollar. Were we down and out for the week, or did the British pound have one final trick up its sleeve?
Unfortunately the former statement turned out to be true, as the pound limped home with a final figure of 1.9767, which gave the Brits something to think about over the weekend. So has the US dollar started the long road back to power again? It has certainly looked very shaky over the past few weeks and while this is bad news for the British pound it will be interesting to see how the US dollar moves on from here.
It was a week to forget over in America as far as the pound was concerned, but could sterling do any better when it came to the Euro?
Last week was a good one for the pound, but this one would turn into something of a choppy affair. The pound ended with an exchange rate of 1.2677 Euros to the pound last week, and by the end of play on Monday we were looking at a slight drop down to 1.2618. Was this an indication of a similarly bad week up against the Euro as it had been against the dollar?
Tuesday's closing exchange rate at least was a little better, as it climbed back up to 1.2662 – a rise of just 0.0044 on the previous day – but at least it was a rise. Things got better still the following day as the pound took control and climbed to 1.2711 Euros to the pound, sending some people heading back to their currency converter to see how much that European holiday was really going to cost them.
But any decisions should have been made quickly because the following day saw the pound back into 1.26 territory again – finishing on 1.2675 and making us wonder whether we had peaked too soon and were now going to slide back in the opposite direction.
The pound did manage to regain some lost ground by the close of the week, finishing on 1.2692 and representing a marginal rise of 0.0015 against this time last week. Well, at least it was heading in the right direction. This will be an interesting tussle to keep an eye on, as things are far from settled in Euroland and the rising interest rates and struggling economy in Britain are matching it virtually stroke for stroke. It's not really a case of wondering which currency will get the better of the other one; it's more a question of which currency is the least weak of the two at the moment, and the way things stand we can expect a tumultuous time for some time to come.
So how did things progress over in Hong Kong? The pound did well for the first half of last week as we saw, but the second half left a lot to be desired, showing that timing is everything if you are looking to get a good deal on transferring your currency into a foreign one.
Was there better news this week? Well the previous week ended on an exchange rate of 15.555 Hong Kong dollars to the pound, and by the end of the following Monday we were looking at a figure of 15.500 – already quite a difference. Was this turning out to be a week to forget for the pound, or could it pull a better result out of the bag?
Tuesday brought a slight improvement to 15.513, but a more substantial improvement would be nice to see for the days ahead. Unfortunately it wasn't one we were going to see, because at the close of play just twenty four hours later the exchange rate had gone in favour of the Hong Kong dollar again, and stood at 15.463. That was a difference – and a drop – of 0.05 in a single day, and it didn't bode well for the rest of the week.
The last day of the month brought a further drop to 15.439, and to finish off what was clearly a week to forget for the pound, Friday's final figure saw the exchange rate slip even further from our grasp, as it tumbled to 15.426. Not the best week for the pound and one that it will hopefully be able to reverse next week. Only time will tell, but surely it couldn't get much worse than what we have seen this week?
Over to New Zealand now, where the pound had a good week last week – taking charge and doing well virtually the whole way through, although one suspects it was more a case of the New Zealand dollar having a bad week rather than us having a good one.
Still, it will be interesting to take a look at what happened next, after finishing with an exchange rate of 2.6824 the previous Friday. Monday 28th July ended with that rate slipping slightly to 2.6704, which didn't bode well for the rest of the week; it was shaping up to be a week that the British pound would rather forget.
But we experienced something we weren't used to of late by the end of Tuesday – we had some good news. The pound had managed to claw back some ground and finished on 2.6889 New Zealand dollars to the pound, which looked altogether more promising. The following day that improved still further to an impressive 2.7019, leaving us wondering whether this was going to fly in the face of the negative results we had seen elsewhere.
There was a slight drop on Thursday though, as the pound slipped back to 2.6992 – could we regain the 2.70 territory the next day to close out the week in style, or would the New Zealand dollar have enough fight in it to get the upper hand?
If you were to look at the results for the pound's performance against other currencies last week you would have been forgiven for taking the pessimistic point of view and fully expecting it to stay below the 2.70 mark. But as things turned out, the pound did win the day by finishing on 2.7133 – easily topping the 2.70 territory and giving the Kiwi currency something to think about over the weekend.
We had a good week in Australia the previous week so there was a lot of interest here too, to see whether we could keep up the pressure. 2.0535 was the number of Australian dollars the pound was claiming last time, so Monday's end of day result of 2
.0777 was a very healthy start. But could things get any better?
Well it seems as if the week of bad results elsewhere was going to be wiped out by the results the pound could get in Australia, because Tuesday brought even more good news as the pound claimed an exchange rate of 2.0834 against the Australian dollar. That went up further to 2.0933 the following day, and as if that wasn't enough there was better yet to come.
At the end of the penultimate trading day of the week, the exchange rate had climbed to 2.0970, leaving us to wonder whether it would manage to get through the 2.10 barrier before the week was out. You would have bet against it on Monday, but now it didn't seem so unlikely after all.
And in fact the pound performed even better than that, claiming a final exchange rate for the week against the Australian dollar of 2.1148 – a resounding victory in what was otherwise a bit of a worrying week. Clearly, in a climate like this we need to take our victories where we can.
Notable events in the world of currency
Dubious victory for South Africa
Some currencies seem to be struggling more than others, but although the South African rand hasn't exactly been the strongest currency on the world market of late, it certainly came out on top when it went head to head against the pound last week.
An exchange rate of 0.0669 at the beginning of the week turned into an exchange rate of 0.0690 by the close of play on Friday, proving that the pound is having a rough week even against some of the less popular currencies.
Bad news on inflation for Euroland
The last day of July brought bad news for Euroland, as their inflation rate was announced at 4.1%.
This was hardly unexpected news but it does put more pressure on the area to prove that it can handle the situation when times are bad and the effects are felt across such a wide swathe of countries.
US dollar has an active time up against the Euro
The US dollar is at least showing some spirit in putting up a good performance against the Euro last week. As we have seen with so many other currencies however, any big gains are short lived but there is no doubt that things seem to be brightening up for the US dollar.
The question is, how long will they stay that way?
If you want market analysis on the foreign exchange markets as it happens, then visit www.forexsites.com for the latest information. Clickable headlines on the home page make it easy to find what you need, as quickly as possible.
So it wasn't the best week for the British pound, although in the current unstable climate where we are seeing big changes in the economies of so many major countries this is hardly surprising. Our eyes should now be on the weeks ahead, as we wonder whether things will get a lot worse before they get better, and although this may seem like a very downtrodden point of view it's hard to be optimistic when we can see so many interest rates going up and inflation going the same way.
We will be back here again next week to see whether the pound can improve on its performance – or whether there is more bad news to report.