Well here we are again with our regular look back on the month with regard to the currency markets. And the US dollar for one will be hoping for some better results than it had last time. If you remember, it was down a mammoth five and a half cents against the British pound last time around. This is quite something considering that the US dollar has been the one that’s been in the driving seat for quite a while now. Will it do any better this time around? The US dollar also lost four and a half cents against the Euro and dropped over two points on the Japanese yen last time around in May. Clearly this wasn’t the best month for the currency, and no doubt we will be analyzing the results carefully today to see whether it picked up the pace at all during June. Of course a lot can happen in the space of a month, and whereas last time the dollar was clearly on the way down, it could be very different now. And the British pound did have a better time of it in general during May, so perhaps it is now time for us to see that the US dollar has regained a stronger position, as we look at our currency converter. So with that in mind let’s see how things actually progressed during June, and take a look at the actual figures to find out whether the US dollar did any better than the month before.
An overview of the currency markets during June
More troubles for the US dollar? Or a better performance?
When last month came to a close in the currency markets, we finished up on 0.6191 British pounds to the US dollar. And after the 5.5 cent loss that equated to, we’re clearly hoping for better this time around. Let’s see if we got it shall we? As the month started there was a slight fall to contend with - 0.6104 at the close of the 1st soon gave way to 0.6051 two days later. But that was before the dollar managed to up the ante to 0.6201, where it finished that week. There was a brief jump up to 0.6280 on the 8th, before things went back downhill again and pretty much wiped out the good work of that first week. That second week finished up on poor territory again, with an exchange rate back down at 0.6096. It didn’t exactly make us feel enthusiastic for a good month as far as the US dollar was concerned, so could we improve on that as the time went on? Monday 16th June certainly did dawn bright and early, since the exchange rate by the end of the day had shot up to 0.6116. Now this was the start to the week that we really wanted, and the thought now was that the US dollar might actually have the strength to build on this and make a successful play for a better exchange rate to close out the month with. Perhaps the second half of the month would indeed be better than the first? If that were true, the following day certainly didn’t do anything to make us feel confident of a good progression. By the end of the day the US dollar had slipped back once more, this time to 0.6074. It was almost as if a pattern were developing here that was akin to what we had seen the month before. Every time the dollar had made some progress, it would be stamped out a day or two later and the exchange rate would be much worse again. Was there anything the dollar could do to get into a more favorable position?
Well it did try, because on the very next day the exchange rate was back up to 0.6157 again. And that effort clearly continued for a bit longer, because the day after that the dollar pushed up further to 0.6165. But unfortunately that was where the efforts ended, and once more the US dollar was all set to finish the week on a bad footing. The final day of that week ended with an exchange rate against the pound of 0.6080. Could the dollar even stay above the 0.60 rate to see out the month, or would it dip below that too?
There was very little change on the Monday, with the exchange rate adjusting to 0.6079, but there was better news the following day. That was the 23rd, when the exchange rate went back up to 0.6133. It seemed as if the pattern was going to be a seesaw one for the remainder of the month though, because we didn’t even have time to celebrate that slight increase. The next day it was back to 0.6053. What on earth would happen next?
As it turned out, after an improvement to 0.6145 on the 25th, things slid back and stayed there. And the final exchange rate for June was 0.6028. That meant the US dollar had lost out on 0.0163 over the course of the month. Not the result we had been looking for, but at least it was not as bad as the previous month.
Let’s move on to the Euro now, against which the dollar finished up on 0.7093 at the end of May. It lost a reasonable amount there too as we have seen, so could we do better during June?
Well by the end of the first day the dollar finished up on 0.7032. This was a small loss, but would it set the tone of the month as a whole?
That first week finished on 0.7053, but the following Monday saw a spike which sent the dollar to war against the Euro. By the end of that day we were looking at an exchange rate of 0.7211. What an improvement – but could we hang onto it? Two days later we were back down to 0.7091, so it seemed that we couldn’t.
Things weren’t going to be that easy though, because there were a few more ups and downs in store before the month was out. That week ended on a reasonable 0.7140, and the following week was better, since it recorded a peak exchange rate of 0.7225 at one point. We were deep into the month now, and with a closing rate that week of 0.7177, it didn’t seem as if we were going to get anything major in the way of an improvement against the Euro for the month as a whole.
Things looked up again on the 22nd as the US dollar managed to bag 0.7216, but that would be the last time that month that the dollar got to those heights. The following day saw it dip back down to 0.7154, and as it finished the week on 0.7094 it was clear that nothing much was going to happen between that point and the end of the month.
And in fact it dipped back a little further to 0.7075 before the month was out. That meant the dollar had lost ground again this month, but only by a tiny margin. This time it had 0.0018 less than it had just thirty days earlier. We can probably call that a draw this time round.
It’s time to check out the Hong Kong dollar now, and see how the US dollar did when it went up against it. The last exchange rate from last month was 7.7509, after a tiny increase of 0.001. By the end of the first week the exchange rate was on 7.7510, so very little difference all in all. And it was the same in week two, with a closing rate of 7.7508 recorded. Did this mean there wasn’t really much to report at all this month, or were we being lulled into a false sense of security?
As it turned out there really wasn’t much to worry about. The third week ended on 7.7502, and by the end of the month the final exchange rate was 7.7501. So you can see there was actually not much to report, with a change of just 0.0008 going in favour of the Hong Kong dollar.
Finally we speed over to Japan to see how their currency, the yen, fared against the US dollar. Could we take the upper hand here?
From a starting point of 95.914, we progressed through the first week to end on 96.973. We actually hit the highest point of the month quite early on the 8th, with an exchange rate of 98.463. But we dipped back down out of the 98.0 territory on the 16th, with a drop to 97.033. Could we regain it, or would we settle for lower figures for the rest of the month?
Unfortunately the latter was true. We fell back again to 96.300 the following day, and we never got above the 96.0 barrier for the rest of June. In fact on the week ending the 26th June, the exchange rate fell to 95.417, indicating that the best times of the month were indeed over. And the final exchange rate for June against the Japanese yen turned out to be 95.875. That meant the US dollar had lost out on 0.039 – although with those huge mid-month increases we could have added on a lot if we had been able to hang onto them.
Meanwhile, over in Europe…
As ever it is now the time to see how the Euro performed during June. This major currency has had its tough times of late, but would June be hard work too, or were there better results to come?
The first day of June saw the Euro bag 0.8680 against the British pound, and that climbed to 0.8792 by the end of the week. It didn’t last long though, with the pound fighting back and the Euro dropping to 0.8538 by the end of the week after.
At the end of the month as a whole, the Euro was actually further behind at 0.8521, meaning it had lost out on a cent and a half since the first day of the month.
Elsewhere last month…
Let’s take a look at a few random currency pairings now to see what else happened during June.
The New Zealand dollar was forever going up and down against the British pound; from 0.3960 on the 1st it finished on 0.3899 on the 12th. And it continually went up and down between the 0.38 and 0.39 range before finally settling on 0.3934 on the last day of the month.
The Kiwi dollar had a good time against the Euro too. It finished on 0.4562 on the 1st June, and after dipping back into the 0.44 range for a while, it climbed back to 0.4579 on the 11th. It also had a taste of 0.46 territory during the month and it obviously liked it, because the final figure recorded on the 30th June was 0.4617 – having added on 0.0055 since the 1st June.
Looking forward
So we’ve had another interesting month to evaluate as far as the currency markets have been concerned. Perhaps it wasn’t the best month for the US dollar, but things could have been worse. All in all the final result was better than it had been in last month’s report, and the losses were minimal this time around.
The question now is whether this is the start of a turnaround for the US dollar. Perhaps next time we will see some great results coming through and some bigger gains for the dollar?
That could simply be so much wishful thinking, but it is good to be positive and to hope that we do indeed have some good results to celebrate in future. The currency markets are still volatile though, and the effects of the recession are certainly touching on the currency markets in many ways. If we can remain strong against other currencies, then the US dollar might yet have some much better months in store.
We’ll be back next month to see whether that pattern has started. We’ll see you then.