Summary Of World Currency Markets For July 2009

Thursday August 6, 2009

Welcome back to another round up of currency news for the previous month.  So last month we were looking at the US dollar and we’d seen that it was doing a bit better.  We ended on a rather positive note too, looking ahead and wondering whether we were going to see a better future for the dollar after several months of struggling and trying to get ahead. The struggle against the pound had slowed down somewhat.  Even though the dollar lost out to the tune of 0.0163 last month, it wasn’t as bad results wise as the month before had been.  So we have to look for positives where we can get them.  And if you use those results to start looking ahead and speculating, we might just see a turnaround this month where the dollar stays steady.  Moving ahead of the pound again would be nice, but if we can see fewer losses on our currency converter that would be good enough. The dollar pretty much had a stalled month against the Euro last time round.  Neither currency really gave very much away, so we ended June virtually the same as we had started it.  But was July the same, or did the dollar manage to exert a bit of pressure there?  We’ll find out in just a moment. There was little movement against the Hong Kong dollar either, although the Japanese yen tried and succeeded to move ahead against the US dollar.  So with June finishing up a rather lackluster month for the dollar, let’s see if July bagged any better news. 


An overview of the currency markets during July


How did the US dollar do this time? 

Well we already know what the losses were last month.  But could the British pound stay strong and beat down the US dollar yet again?  This was something of a different picture to the one we’ve been used to in recent months, but who knows – it may change yet again. We started July on an exchange rate of 0.6028.  There was an upward push by the dollar to start the month on a good note at least, and it finished on 0.6074 as the first day came to a close.  Things were looking promising too as the following day saw it push through another barrier and finish on 0.6102.  And with the following day seeing it end the week on 0.6112, there was every reason for us to feel optimistic. But two or three days is a short time in a month.  The question was whether or not we could carry on with this.   The next week was good too though, at least for starters.  The 6th July saw an exchange rate of 0.6197, while just two days later that had climbed up further to 0.6222.  But it couldn’t hang on to those heady rates, and the dollar slipped back to 0.6172 by the time the week was out. There was another surge upwards by the US dollar as the next week got underway though.  That was when it bagged 0.6209.  A battle of wills ensued which saw the end of the week finish on 0.6141.  Slightly further down for the dollar, but still high enough to be worth noting. But this time when the next week got underway, it was the pound that pushed back and got the results it wanted.  The dollar was down to 0.6049 by the close of play on Monday, although it fought back and grabbed 0.6083 by the time another twenty four hours had gone by. 

It seemed as if neither currency was really willing to give the other one an edge.  With the exchange rate creeping to 0.6094 the following day, it was clear that this wasn’t going to be the month to see huge sweeping changes going on.  Another twenty four hours went by and another small swing – this time in favor of the pound as it went back to 0.6055.  But the stubborn dollar pushed back once more, determined to end the week on a better note and grabbing an exchange rate of 0.6094 in the process.

 So Monday dawned and now we were into the final week of the month.  So far the dollar had taken around half a cent more than it had when the month had begun, but with so little in it things could easily swing back in the other direction. 

And as the end of the day drew near, the rate dropped back to 0.6064.  When it fell further to 0.6059 by the following day, it must have been thought that we would end up just where we’d started.  Wednesday saw that surge of optimism again as we completed the day on 0.6105, but with two days still to go there wasn’t much in it.

 As it turned out the final exchange rate for the month would be 0.6051 – just 0.0023 up on last time for the US dollar.  It’s better than a loss though. 

The US dollar finished on 0.7075 against the Euro last time, so let’s see whether it can recoup the tiny loss of 0.0018 from then.


The exchange rate by the end of the first day of the month was 0.7094.  A little better – but would this repeat the pattern seen with the British pound?


As it turned out the dollar improved its standing to 0.7117 the very next day.  And it managed to stay in the region of 0.71 against the Euro until the 15th July, when it finally slid back down to 0.7097 again.  This was something worth noting anyway, as the dollar clearly had the upper hand for the first part of the month at least.  Even though the higher rate was only a little higher, it was still better than nothing.


The question now was whether it could regain that higher level once more before the month was out.  It dropped back to 0.7077 the following day but then regained the 0.7097 level again.  Things were looking quite good at this point, but of course that is when it can all change.


And it did.  The following day it dropped back to 0.7033.  These may only have been small changes but it was the effect they were having that mattered.  Nothing seemed to be good enough to have the desired effect and gain some proper ground against the Euro for any length of time.  That week ended up finishing on 0.7028.


As the final week of the month took off, the US dollar ended that first day with 0.7008 Euros to the dollar.  It pushed up steadily until it hit the 0.7115 mark on Thursday – but then slid back to finish the month on 0.7073.  Did it make a difference overall?  The answer was no – the US dollar was bagging just 0.0002 less than it had a whole month before.


The US dollar had got the Hong Kong dollar to 7.7501 last time around, so let’s go there now to see what happened during July.  Things stayed around the 7.7501 – 7.7502 range for quite a while, before peaking at 7.7504 on the 14th of the month.


The US dollar soon slid back from that position though and ended up on 7.7499 on the 22nd.  Now looking to fight back and at least regain the position it started from, the US dollar got back to 7.7500 by the time the final week started.  It reached the heady heights of 7.7508 the next day, before slipping back and ending on 7.7500.  So, this was another miniscule loss overall for the month.


Finally let’s see what happened in Japan.  The exchange rate from the previous month left the US dollar on 95.875.  The closing rate on day one was 96.857, but from there things slid back alarmingly to 92.230 on the 10th.  But it was almost as if the US dollar got a huge shock from that, because it then began a steady fight back which lasted for the whole of the rest of the month.


The dollar finally ended up on 95.720 as the month of July finished.  That meant it had lost some ground – although it wasn’t anywhere near as bad as it could have been.  It lost 0.155 in total.


Meanwhile, over in Europe…


As per usual we now take a look at what was happening in Europe at the same time all this was going on.  The Euro lost a cent and a half against the British pound during June, and although it enjoyed several nice increases against the pound during July, they didn’t last long.   

From the 0.85 region into the 0.86 region of the currency exchanges, the Euro finally washed up on 0.8556 at the close of play for the month as a whole.  It had added on just 0.0035 in total.


Elsewhere last month…


This is the point where we look at a few other currency exchanges last month to see what was happening there too. 

New Zealand had an interesting time against the British pound, as the Kiwi went from 0.3888 at the end of day one to 0.4013 at the end of day twenty nine.  But there were still two days to go until the month was over, and it couldn’t quite hang on that long.


It still managed to finish on a respectable 0.3965 though, adding on 0.0077 over the course of the whole month.


The Kiwi actually didn’t do that bad against the Euro either.  Its starting point there at the close of play on day one was 0.4541.  Once again it established the pattern of dipping down and losing some ground before perking up again to finish the month on 0.4634.  That was a better winning margin of improvement than it had seen against the pound, with a closing increase of 0.0093.

 The Euro didn’t have a very good month as you can see.  But the result against the Canadian dollar will certainly raise your eyebrows! 

Take a look at this.  At the end of the 1st July the Canadian dollar was worth 0.6163 Euros.  It climbed to 0.6242 on the 14th and straight into 0.6323 the very next day.


It took a few days but there was more good news to come for the Canadian dollar as well.  That was when it soared further to settle on 0.6407.  The end of the month wasn’t far away but by then it was looking even better.  It finished with a flourish on 0.6564 – a full four cents more than it had been a month earlier.


Looking forward


So there we have it for another month.  Not a great one for the US dollar – probably more of a frustrating one than anything else – but fantastic for the Canadian dollar as far as the Euro went at least. Of course every month brings a different story and next month’s could be very different indeed.  We could be reporting on a tough time for the US dollar – or it could be very different and we could be celebrating some excellent results. The problem is we just don’t know.  That is the nature of the currency markets.  And during the recession it is even more difficult to predict with any surety what will happen next. It is an interesting time if you are watching what happens with no interest in the Forex markets though.  This is generally an uncertain time if you are thinking of getting started there – we wouldn’t recommend it!  But we will be back here next month as usual to tell you all the ups and downs that occurred during August. Who knows what results we will be reporting then?  It could turn out to be a great month after all, but the way the US dollar has been at loggerheads and somewhat stuck against other currencies recently, we wouldn’t bet on it.  Anything could happen next, and probably will. That should give you something to think about until next time.  We will see you then.