With good news coming to us last week, we were hoping for more of the same this time around. But as you have probably guessed from our heading, this would not be the case.
An overview of the currency markets for May 22nd – May 26th, 2017
As the new week began, the British pound began on 1.3012 against the US dollar. We were hoping for a strong performance, but while the pound climbed to 1.3019 on Monday, this was as good as things were going to get this time around. In fact, the rest of the week was downhill all the way for the pound – not what we were expecting. By the time Friday’s trading had ended, the pound was stalled on 1.2840 – far lower than the opening rate on Monday morning had been.
So, would we see a similar pattern occurring against the euro as well? Here, we started trading on 1.1640, but two poor days opened the batting and left us on 1.1565 by Tuesday night. We rallied somewhat on Wednesday, pushing ahead to 1.1582, but another two poor days were to follow. This left us on a disappointing 1.1469 by Friday evening.
With two poor results thus far, could we expect more of the same by the time we reached Friday night against the Hong Kong dollar? We began trading on 10.126 here, and enjoyed a rise to 10.136 on day one. However, that was about as good as things would get, as we then fell to 10.097 over the course of two days. A mild rise – very mild, as it turned out – saw the pound go from 10.09752 to 10.09754 on Thursday, before an obvious drop to 10.006 happened to finish the week.
With three disappointments, would the same pattern be replicated in New Zealand and Australia as well? The pound began on 1.8888 against the Kiwi dollar, before dropping over the course of the first two days – taking us to 1.8422 by Tuesday night. While we rose to 1.8424 the following day, and to 1.8426 on Thursday, we did not have enough to prevent a huge drop to 1.8185 by Friday night.
So, we were almost resigned to a loss against the Australian dollar as well this week – but would that be right to assume? The pound opened on 1.7496 this week, and again we had a similar pattern. Two poor days led to a rate of 1.7277 on Tuesday night, and then two better days took us back up to 1.7360. But this couldn’t prevent another fall on Friday, this time to 1.7247.
Notable events in the world of currency
A fall against the Canadian dollar
We dipped from 1.7657 to 1.7292 against the Canadian currency this week, representing a huge fall here.
More of the same against the Swiss franc
Another notable fall for the pound here, as it went down from 1.2712 to 1.2487 this week.
Even the Icelandic krona fared better
The pound started trading on 130.427 this week, before falling back to 128.427.
So, we can see this was far from a strong week for the British pound. It was disappointing after we had made some progress last week, as we felt that progress had been easily wiped out.
One week can change things markedly, though, and perhaps next week we will see things change back in our favour again. With many events taking place now that can have an impact on our standing in the currency markets, it is perhaps to be expected that the pound is struggling. With the election getting ever closer, perhaps we shall not see many good results until this is over and done with. Then we can look ahead and press on with the Brexit negotiations – although those are not set to be smooth sailing, either.
We must simply accept the currency markets will show us choppy waters for the time being, and be ready for many ups and downs over the coming weeks and months. At least, it makes for interesting reading for us.