While the British pound was doing well against the troubled Euro during November, the same could not be said against the Hong Kong dollar. Here the pound was starting with an exchange rate of 12.453, but it would not hold that ground for very long.
Things didn’t look bad to begin with, although it did drop to 12.386 on the currency converter on the first day of November. But it was back up to 12.449 the day after, and the first week finished with a rate of 12.423 on the cards. This didn’t tell us much to begin with, as it was fairly routine ups and downs to start.
However the pattern we witnessed during week two was one of almost constant lows, as the pound sank to 12.399 by Friday night. Was this the start of a more prolonged series of lower rates throughout the month for the pound? It certainly set off some alarm bells.
Indeed the next week showed us a very similar pattern, with some ups and downs evident – although they were mostly downs and led to a week ending rate of 12.320. Clearly the Hong Kong dollar was the stronger of the two currencies at the moment, and the British pound wasn’t able to do much to keep up.
However if we thought we had seen the biggest drops of the month, we were wrong. These were still to come and they occurred during the next week. This was when the pound slipped still further to land on 12.051 – perilously close to dropping below 12.0 altogether. However perhaps the shock made it bounce back because the final three trading days of the month saw the pound climb back up as far as it could. Day one saw it reach 12.122, day two boosted that up to 12.174 and day three made it finish the month on 12.203.
So the power was with the Hong Kong dollar last month, but at least the pound had started to push back in the right direction by the end of it.
I wonder whether it matters if the pound has a poor showing against a major currency like the Hong Kong dollar on a monthly basis like this. After all most of the time the currency bounces back up again eventually. I suppose it depends on whether the marketplace in general is doing well or not. I never quite understand currencies and how they work. But it is interesting to see the pound going up and down day to day.
I think it matters if it means the pound gets a poor headline. The power of negative news is sometimes worse than the actual drop in the currency rate.