So here we are with our last round up of the world currency markets for 2009. How will the various currencies fare as we head into a New Year?
November was an interesting month which gave the US dollar a very slight foot up against the British pound. The difference was minimal though so it will be interesting to see whether it finished the year on a stronger note. The US dollar didn’t do so well against the Euro though, losing out on a whole cent as November came to a close.
The worst result of the whole month for the US dollar came at the hands of the Japanese yen. By the time the month was out the dollar was 4.606 worse off than it had been at the start. So it needed a good month during December to rectify matters on the currency converter.
The Euro did well elsewhere too, and it came out on top against the British pound as well as the US dollar. The Euro easily advanced from 0.8937 at the beginning of November to stand at 0.9115 by the end, but could it repeat that success for the final month of the year as well?
Of course all is not won or lost on what the exchange rates are doing on the last trading day of the year. Overall it could be that a poor closing performance belies an outstanding performance and improvement throughout the year as a whole. But let’s see what did happen in those last few important days of the year, as 2009 finally drew to a close on the currency markets.
An overview of the currency markets during December
How did the US dollar perform against the other main world currencies?
The US dollar added on a total of just 0.0029 against the British pound overall during November, so what could it do during December? Would it have a better month or would the pound fight back and make some gains somewhere?
The starting rate for the US dollar before the month kicked off was 0.6067 against the British pound. This dropped marginally to 0.6035 on the first day of the month, but there was worse in store as the dollar got off to a bad start. By the end of the 2nd December the rate had worsened to 0.5992.
So did this mean the pound would get the upper hand this time around, or did the dollar have plenty more in store to come back with?
It did at least manage to surpass the 0.60 rate again the following day, closing out a brisk day of trading on 0.6012. But what would happen next?
That first week finished with the US dollar on 0.6004, so it was down over half a cent since trading began at the start of the month. It was still early days though, so anything could happen yet.
The following week was far more successful, with the dollar climbing to 0.6120 on Monday evening and then reaching a week long high of 0.6139 by the end of the 10th. Friday evening saw it hold on to this performance and it only slipped back slightly to 0.6133.
The dollar was clearly in the driving seat by this time, and this made us wonder whether the pound had anything much to fight back with. The following week once again saw the momentum continue with the dollar, as it achieved a high of 0.6204 on Thursday evening before dropping back once more to close the week on a still respectable 0.6186.
As the following week got underway, it really started to tell the story that would be remembered for the month as a whole. The pound could not seem to find any strength at all, and this was displayed in the exchange rate the US dollar managed to bag on Monday evening. It achieved a rate of 0.6206 at the close of play.
We were into Christmas week itself now, and that meant only four days of trading as the markets would close on Friday for the Christmas holiday. The 23rd saw the best rate of the week as the dollar soared to 0.6267. And even though it fell back to 0.6256 on Christmas Eve it still represented an increase of 0.007 over the previous week.
There was very little change at all on the first day back after the Christmas break, but that didn’t seem to worry the US dollar unduly. A short while later on the 30th of the month it achieved an even better rate of 0.6304 – the best rate of the whole month.
This perhaps lulled us into a false sense of security, because New Year’s Eve had one more surprise in store. The final rate of the year was 0.6164 – losing out on nearly one and a half cents in twenty four hours. The US dollar still managed to add on a cent since November though, so it finished the year well all in all.
So was the story a similar one where the Euro was concerned? Let’s find out now. The US dollar lost a cent here last month, so hopefully December panned out rather better.
Our starting rate was 0.6656, and things stayed in the 0.66 region until the 7th. This was when the dollar increased its standing to 0.6762. It wasn’t a momentary improvement either because it stuck for quite a while. In fact, it got even better as the days went on. On the 14th December the dollar claimed a total of 0.6827 Euros, and it finished the week on an even higher rate of 0.6974.
But could it hang on to that performance? The answer was yes, and it achieved a high point for the whole month of 0.7004 on the 23rd December. The final day of trading before Christmas left it on 0.6945, and although things were a little rocky on the final week of the year, the US dollar still managed to finish on 0.6941. That meant it had definitely had a successful month against the Euro, with well over two and a half cents being added on to the exchange rate all in all. As far as successful months go, this was certainly a great way to end the year.
The tussle between the US dollar and the Hong Kong dollar was so close it was barely noticeable last time around, but would it prove to be the same during December?
Our starting rate here was 7.7501, and this started to climb steadily until it reached 7.7567 on the 18th of December. This was the Friday immediately before Christmas week, and the figure represented more of a change for the good than we have seen in a long while.
And in the end the final rate achieved on New Year’s Eve was a little lower at 7.7543. This was still a good result overall though as it ended up 0.0042 higher than the US dollar had started the month.
Finally we should take a look at the Japanese yen. The dollar definitely came off worst in November as it lost a total of 4.606 during that month. The starting point this time was 86.380, so let’s see if we can improve on that.
The first week finished well as the dollar upped its game to land on 88.319. It managed to break through the 90.0 barrier at one point in the following week, although it soon dipped back underneath it again. By the 18th it had improved to 90.451 however, so we were hopeful of a good end to the year here.
And indeed we got it, because the 90.0 territory was soon left behind in favour of bigger and better things. The US dollar finished the year against the Japanese yen on 92.433 – which is an incredible 6.053 better than it had started way back at the beginning of December.
Meanwhile, over in Europe…
Let’s take our regular brief look at what went on between the British pound and the Euro now. The Euro rounded off November on a rate of 0.9115, but could it do better to close out the year as a whole?
After just one day of trading the Euro dipped back to 0.9098, and as it turned out it would not get back to the region of a 0.91 exchange rate before the year was out. The only question now was how well the pound could perform in counterpoint.
The Euro lost more ground on the 15th as it fell back to 0.8960, and the following day made things even worse. It slipped back to 0.8894 and didn’t look as if it was going to improve on it either. Where would the month end?
Things went up and down a bit after that, and although the Euro did regain a 0.90 exchange rate for a few days it couldn’t finish the month on that note. Instead it bowed out of 2009 claiming 0.8881 against the British pound. This equated to a loss of 0.0234 over the month as a whole.
Elsewhere last month…
During November the Australian dollar picked up an additional 0.0273 against the New Zealand dollar. The closing rate was 1.2775, and during December this changed remarkably – but it didn’t go in favor of the Aussie dollar.
It did reach a high point of 1.2829 on the 3rd, but that was the best of it. When New Year’s Eve came around the exchange rate had positively gone into freefall, landing on 1.2370. That meant the Aussie dollar had lost what it had gained during November and then some – totalling more than four cents as a whole.
But what about the Swiss franc versus the Canadian dollar? Last month we left these two on 1.0538, so could the Swiss franc improve on that in any way?
The answer was no as it fell steadily as soon as the month got underway. The lowest rate of all was just 1.0059 Canadian dollars to the Swiss franc, which occurred on the 23rd of the month. It managed to push things up a little to 1.0114 the following day before the Christmas break, and by the end of the year it was slightly better off on 1.0196. It had still lost out on 0.0342 in total however.
Looking forward
So that was how 2009 came to an end among the main currency pairings on the market. Looking ahead to 2010 can we expect much of the same, or will the underdogs press forward and start the year on a better note?
There were some quite notable losses and gains during the last days of 2009, with the Swiss franc suffering against the Canadian dollar and the Euro faring badly against the British pound. But will these results be repeated during January 2010, or will we see something different instead?
We can only wait and see what actually happens. But December did give us some movements in the currency markets where previously there had been little to report on. Take the result between the US dollar and the Hong Kong dollar for example. During October and November the changes were hard to spot, and yet December brought us something very different to report on. Will this continue into the New Year, or was it a one off?
Needless to say we will be watching closely to see what happens as the New Year gets underway and trading begins once again. Will the positive thoughts that accompany the start of a fresh year be good to bear in mind, or will we be entering into another year of drama on the currency markets?
One thing is certain – we will definitely be seeing plenty of ups and downs. It just depends on which currencies head in which direction – and how far they climb or fall. We can’t wait to find out.
But until next month when we give you the lowdown on what actually did happen during January 2010, let us wish you a Happy New Year.