Has another month passed us by already? Indeed it has, and while we are still in the depths of a recession that will continue for some time, we are hopeful that we will see renewed strength in the currencies sooner or later.
Fewer people are heading off on holiday or buying foreign currency even for a much needed weekend away. The currency converter is not yet giving us reason to exchange our own currency to get something better elsewhere.
The US dollar didn’t have a bad month during February, but we know how quickly things can change when it comes to the currency markets. So let’s see whether the US dollar was able to do just as well in March – or whether we have different results to show you.
An overview of the currency markets during March
Did the US dollar manage to keep the upper hand?
Last time we saw the dollar do quite well overall. It has certainly had a strong showing against the British pound over the past few months, and it could well continue like this for a while.
It did have a choppy time against the pound during March, starting off with a closing figure of 0.7063 on that first day. It managed to hit 0.7100 on the third before dropping back down again to a similar level to the one it started on.
It finished the first full week of March slightly worse off than it had started though, claiming 0.7031 British pounds to the dollar. This may only have been a small drop, but the difference was going in favor of the British pound. That was quite a change given the fact that the pound has been incredibly weak of late, but the difference was only a small one.
The key was in what would happen next. As the following week got underway on the 9th March, the US dollar showed what it was made of and pushed back remarkably. The closing exchange rate on that Monday was 0.7253 – a full two cents (and then some) up on the previous trading day. Was there more in store like this, or would the British pound beat the US dollar back down again?
The US dollar managed to stay in the region of 0.72 throughout the week, registering 0.7282 on the 12th. There was still one day to go that week though, and as it happened the US dollar wasn’t going to be able to cling onto the 0.72 territory any longer. That week finished up with an exchange rate of 0.7144 – still better than the previous week, but not perhaps as good as it could have been.
So then we’re on to the third week, and it almost seemed like the dollar was beaten down by the result of the previous Friday. A rather lackluster Monday resulted in a closing rate of 0.7058, and the question of whether the pound was actually going to start fighting back for once. The immediate answer was a resounding no, as the following day registered an improvement to 0.7158.
A slight slip backwards to 0.7152 marked the midweek point, beyond which things didn’t go well for the dollar. It slumped to 0.6879 against the British pound on Thursday, and while it did manage to regain some ground on the last day of the week, finishing on 0.6934, it wasn’t the result we’d been hoping for.
So what was in store next? Was the British pound finally finding some strength to battle the US dollar with? Would it finally start turning things around and getting back to a halfway decent exchange rate? Or was this just a good blip for the Brits, and the US dollar would soon be back on a more even (and stronger) keel again?
Monday proved that the British pound was enjoying a comeback of sorts, as the exchange rate pushed on to 0.6855. It dropped a little further to 0.6815 the next day, and suddenly it seemed as if this wasn’t just a short burst for the pound. How long would it last? Could the US dollar end the month on a better note?
It did finish the week in slightly better form than it had started, registering 0.6983 as the markets closed for the weekend. The following Monday – the penultimate day of the month – saw the US dollar soar up to 0.7042 against the pound… but that was the limit of its heights for the month. The final day saw an exchange rate of 0.6994, meaning that it had lost 0.0069 since the end of the previous month. Taking a look at the figures it could have been worse, couldn’t it?
Let’s move on now and see how the dollar did against the Euro. The final figure during February was 0.7908, so the US dollar was looking to improve on that if it possibly could. There was a possibility of breaking through the 0.80 mark this time, but the best it could do during that first week was to claim 0.7964 Euros to the dollar. It then slipped back to finish up on 0.7900 at the close of the first week.
The following week wasn’t any better either. It pushed back up to 0.7958 by the close of play on Monday, and from there on in it was firmly downhill. The Euro was in the driver’s seat here, and it led the way to a rather different exchange rate of 0.7748 on the 13th March. An unlucky Friday for the dollar, it seemed.
And it kicked off the next week by finishing Monday on 0.7667 as well, so things weren’t really getting any better. It looked like the dollar was in freefall against the Euro and didn’t have any tricks in the bag to stop the rot. Considering the previous Friday had ended on 0.7748, to have a closing rate of 0.7380 just seven days later was not good for the dollar. That was a loss of 0.0368 over the course of a week.
There were at least some improvements the following week though – the final week of the month. The US dollar couldn’t repair all the damage it had done so far, but it was able to stop the slide and start heading back up again. The 24th achieved a figure of 0.7403, and while it dropped back to 0.7349 just two days later, it moved back up to 0.7521 to finish the week.
March ended on the Tuesday of the following week, and the US dollar finished up on 0.7514 at the close of play. It had lost ground significantly during March, giving up nearly four cents in the process. Let’s hope it can improve on that next time around.
The pattern against the Hong Kong dollar remained pretty steady throughout March. The first day saw a closing exchange rate of 7.7549, and the closest it got to the 7.76 level was on the 4th, when it reached 7.7595. From there it slipped back down to 7.7559 to finish off the week.
The following week was down slightly again, at 7.7531. This was a month of small changes, but there was one larger one in the offing, still to come. The next week saw another marginal drop, as it ended on 7.7502. The week beginning the 23rd saw the dollar drop below being able to claim 7.75 Hong Kong dollars. It went down to 7.7484, before crawling back up to 7.7499 the following day.
The next day brought a slight improvement to 7.7501 before that big change occurred on the 26th – leaving us with a figure of 7.6856 at the end of the day. It was back to business as usual on the next day though, as the dollar went back to claiming 7.7503 Hong Kong dollars by the end of the week. And the final figure for the month was 7.7502. So there wasn’t much change at all overall for the US dollar against the Hong Kong dollar.
But was the picture the same against the Japanese yen? It claimed 97.461 on the last day of the month in February, as it claimed an increase of 7.746 overall. By the 5th March that had improved still more to 99.330, but it slipped back to 96.800 the following day.
The 99.0 mark was reached again on the 9th, as the US dollar claimed 99.005 yen. But that was the last time it would happen during the month, as that week finished on 98.434. A low point of 94.850 was reached on the 19th before things started to look up again.
Finally the US dollar claimed 98.564 to close out the month as a whole, leaving it slightly better off than it had been at this stage during February. So it seems the US dollar is still doing better than the yen.
Meanwhile, over in Europe…
On to Europe now, to see what was happening there. From 1.1196 on the first day of the month, the British pound was keen to bag as many Euros as it could. But a peak of 1.1235 on the 6th was as good as it was going to get.
The rate steadily fell to 1.0632 on the 19th, before perking back up again – at least to an extent. The high point after that was the 24th when the pound claimed 1.0862 Euros, but the month ended somewhat lower than that in the end. The final figure was a meager 1.0743.
Elsewhere last month…
How many Euros could the Hong Kong dollar claim during March? The answer was an ever diminishing amount, as the closing figure of 0.1019 on the 1st of the month went down to 0.0969 by the end of it. The low point came on the 19th with a figure of 0.0943, so at least things got a bit better before the month burnt itself out.
The Aussie dollar did its best against the New Zealand dollar during the month, but the result was a poor one all in all. At the close of trading on the first of the month, the Aussie dollar was claiming 1.2706 New Zealand ones. But its peak for the whole month occurred just two days later, at 1.2897.
From here on in it was pretty much downhill. The lowest point was reached on the penultimate day of the month, at 1.2095, but it managed to pull itself back up slightly to crawl to a beleaguered finish of 1.2119 the next day. That’s quite a loss over the month as a whole.
Looking forward
So once again it was another month which provided us with a mixed bag of results. There were a few notable events to look at – perhaps the surprising one day drop by the US dollar against the Hong Kong dollar to name just one – but on the whole there were the usual ups and downs you would expect.
It is always fascinating to see how the currency markets perform though, and especially so during a recession. They are far more likely to experience a sudden drop or problem instead of remaining largely on an even keel.
And of course we will be back again next month to look at how the markets performed during April. Every day brings different news – sometimes surprising and sometimes more predictable – but it is all equally fascinating to look at. And even those currencies which are having a harder time of things can have moments when they perform better. We are constantly looking for those so we can bring you the most important – and most eye opening – currency news we can find.
So let’s look forward to next month’s report, and speculate over whether the US dollar will remain as strong as it has recently. It has shown a little weakness here and there, but on the whole it remains as the currency to watch. Every currency will ride out the recession in one sense or another – it just depends on what state it is in by the time we are into clearer waters.