It is time once again to see whether the British pound would perform well on the currency markets, or whether it would sink below the previously good rates it has managed to garner. Is it too much to expect another reasonably good week on the markets this time around?
An overview of the currency markets for May 14th – May 18th 2012
The last time we caught up with the pound it was worth 1.6113 against the US dollar. Just one day into the new week, it had dropped back to 1.6078. Was this a sign of further losses to come this week? It certainly seemed to be the case because 24 hours after that the currency had dropped to 1.6051 – a smaller drop but a drop nonetheless. Indeed this would be the story of the week and by the time Friday arrived the pound was worth rather less – 1.5818 to be exact.
So what would the story be against the Euro? The opening rate here was 1.2448 and this edged up to 1.2500 by the end of Monday. The next couple of days saw slight swings in either direction, so it was not as clear cut as the downward spiral against the dollar. However things did end on a slightly lower note than the one they had started on, with the pound closing out the week on 1.2434.
Moving on to see how the pound did against the Hong Kong dollar, we have a picture similar to that seen against the US dollar. Hence we have little in the way of good news, with an opening rate of 12.511 dropping to 12.486 the following day. This was followed by a steady dropping of the exchange rate throughout the week. The one good thing was that the pound stopped short of dropping into 11.0 territory, stalling on 12.283 on Friday night as a result.
So with three disappointing results thus far, were we in store for two more? Our first of two final stops is the New Zealand dollar, where we last left things on 2.0510. By the end of Monday we were in a better position on 2.0667, and things improved still further on Wednesday, leaving us on 2.0713. So could we keep this up for another two days? The answer was yes, and we finally closed out the week on an impressive 2.0816.
We did well in New Zealand but would we do well in Australia too? Our opening rate here was 1.6030 and we improved to 1.6101 by the end of Monday. However that was when the rot started setting in and the next few days saw us slide to 1.5977 by Thursday evening. Eventually we recovered to finish the week on 1.6014.
Notable events in the world of currency
A drop against the Canadian dollar
There was no good news to celebrate against the Canadian currency. The pound dropped from 1.6179 to 1.6089 over the course of the week.
A slight drop after a better midweek performance against the Swiss franc
Here the pound started on 1.4953 and rose to 1.5027 during the week. But we fell back to close on 1.4936 on Friday evening.
A few dramatic rises and falls against the Icelandic krona
The pound started on 202.550 here and hit a high of 203.194 before closing the week on 202.488.
The main story behind the condition of the British pound this week was – surprise surprise – the Eurozone. This story from Reuters – indicated that worries over the situation in the Eurozone were adversely affecting the pound. So in this case we could see even worse results occurring in the near future, depending on what happens in a number of key European countries, not least Greece and Spain.
So until next time let’s hope that the pound bounces back and performs better in the near future.
I guessed this would happen. I didn’t think the pound would be able to keep up that kind of performance for any length of time. I just wonder what will happen when the Euro dives out of existence though – and you can bet it will.