Summary Of World Currency Markets For November 2009

Wednesday December 9, 2009

We’re back again with another look at the monthly situation on the currency markets.  Last month was certainly interesting in some respects, but perhaps not necessarily in the ways we would like it to be.  For example the US dollar lost out overall against the British pound, dropping a total of 0.0171 over the whole month. The Euro also got the better of the US dollar by around a cent, so things were clearly not a breeze for the US dollar last month by any stretch of the imagination.  Things remained steady with the Hong Kong dollar, while the situation with the Japanese yen turned out not to have the required strength to beat the US dollar.  Instead it slipped down and allowed the dollar to gain the advantage. So things were definitely active during October.  But where would that lead the US dollar during November?  Would it be able to come up with a raft of good results – or would there be some fighting needed to come up with the results it needed?  There is no telling how strong or weak the situation was until we look at it in more detail, so now is the time to do just that. Obviously we’re looking for better results than we got last time, but even if we get them there is every chance the US dollar could be back down to a weaker level again next month.  So let’s see what we have to play with this time around, shall we? 

An overview of the currency markets during October The state of the US dollar against other major currencies 

If you have your currency converter at the ready you will see how well – or badly – the US dollar did last month.  We left it on an exchange rate of 0.6038 against the British pound, so let’s see what happened after that.


Just two days into the month the exchange rate crept up to the next level and sat at a healthy 0.6114.  But two days after that it slipped back down to the 0.60 region again and claimed just 0.6053 by the end of the 4th.


Things stayed relatively steady until the end of that week, although the following week got underway in a poor fashion for the dollar.  It dipped down to 0.5964 on the first day back after the weekend.  And even though the exchange rate went back up to 0.6004 the following day, we could see the week as a whole did not round off well against the British pound.  It ended on a poor 0.5994, leaving us wondering whether we were in for a rough month all in all.


The week beginning Monday 16th didn’t bode well either, since the exchange rate fell a bit further to 0.5979 by the time the day was out.  Over the next two days it went down even more before bouncing back to 0.6013 by Thursday afternoon.  The week then ended on a rate that was better still, on 0.6069.  What would happen next?  Would the pound get the upper hand once again or would the US dollar manage to keep up with this improved performance and manage to end the month in a stronger position than it had started?


Monday the 23rd opened with a figure that showed there was plenty more to come however.  The final exchange rate for that day as everyone headed home for a few hours break was 0.6017.  The next day gave us another small increase, although this seemed to be all we could manage at the moment.  Small increases are better than losses of course, but we would prefer bigger increases to show that the dollar is capable of ending the month on a positive note.  So far we haven’t seen anything to tell us the dollar stands a chance of finishing positively for the month against the British pound.


But let’s not be too hasty just yet.  There were still a few more days to go at this point, and anything can happen in a short space of time when it comes to monitoring the currency markets.  What would happen here before the month of November was finally finished with?


Well there was another dip below the 0.60 level on the following day – the 25th – as the exchange rate fell to 0.5987.  Would this be where the rate would end up for the end of the month, or would it go above 0.60 once again?


It did in fact go above that level the very next day, to 0.6044, and it didn’t go below it again for the remaining few days of November.  That at least was good news.  But since we started on an exchange rate of 0.6038, was it possible to keep it above that figure and claim a victory (albeit a small one) for the month as a whole?


As it turned out we finished the week on a rate of 0.6093, which was much higher.  But there was still one trading day left to go in November, and anything could happen in those few precious hours.  Luckily even though the rate dropped again, it only dropped to 0.6067, which meant we were finishing with a higher rate than we had started.  The increase in total was just 0.0029.


As we finished up last month we saw that the US dollar was claiming 0.6756 Euros.  So let’s now take a look to see if the situation got better or worse during November.


The first change in rate was to 0.6756, and that improved to 0.6822 just a couple of days later.  But it went back down to 0.6774 the following day before staying at that level and then going down to 0.6673 on the 9th.  The week finished on the 13th with a rate of 0.6725, and this pattern continued throughout the month.  One minute we were looking at an exchange rate of 0.66 and the next minute it had changed to 0.67.  But which way would it swing before the month came to a close – and would the US dollar manage to succeed in finishing in a stronger position than it had started?


The answer went in favor of the Euro unfortunately, as the final exchange rate for the month turned out to be 0.6656.  This meant there was a loss of exactly one cent since the beginning of the month, so things could have turned out worse than they did all in all.


There was no change between the US dollar and the Hong Kong dollar during October, but would November turn out to bring us a similar story?  The starting point between these two was 7.7501 Hong Kong dollars to the US dollar, so that is where we will start this time around.


There was very little between the two currencies during the first couple of days of trading in November.  But that all changed by the 3rd as the rate changed to 7.7503.  It dropped a little the following day before ending up the week on 7.7499.


And this was really the story we had throughout the month as a whole.  One minute the Hong Kong dollar had the upper hand and then the US dollar would take the reins for a few days.  We saw exchange rates swinging between the 7.74 and 7.75 region, but finally we finished up on 7.7501 as the month came to an end.  So once again, it was the latter few decimal points which showed any kind of change at all between these two currencies.


The US dollar added on a total of 1.476 to the Japanese yen last month, leaving it on 90.986 as the month came to a close.  The first indication of how the month might pan out occurred on the 2nd of the month, when the rate changed to 90.001.  Did this foretell bad times for the US dollar?


A new low of 89.969 was reached on the 9th, and even though it went back up to 90.283 on the 12th that would be the last time we would see that kind of figure during November.  In fact the final exchange rate between the US dollar and the Japanese yen for the month was just 86.380 – meaning the dollar had lost out on 4.606 overall.  That was a big change.


Meanwhile, over in Europe… 

So while all that was going on, what was happening between the Euro and the British pound? 

The pound won the day last time and the Euro finished up on 0.8937, so what happened next?


The Euro upped things to 0.9033 on the 2nd of the month, but after that it went back down into the 0.89 region again and didn’t get back to 0.90 until the 11th, when it claimed an exchange rate of 0.9029.


After some tussling back and forth it actually managed to finish the month in the best position it had been in for the whole of November.  The final rate was recorded as 0.9115.


Elsewhere last month…


Last time we saw the Australian dollar claiming 1.2502 against the New Zealand dollar, adding on over three cents over the month as a whole.  And the good news for the Aussie dollar continued throughout November as well.


It hit a low point of 1.2444 on the 17th, but from then on it was up virtually all the way.  The closing exchange rate for the month turned out to be 1.2775, which meant that it had managed to add on a further 0.0273 cents for November – another great result and the second one in a row for the Aussie dollar.


The Swiss franc against the Canadian dollar was also worth watching as the month went by.  The closing rate on day one was 1.0548 Canadian dollars to the Swiss franc.  This dropped to 1.0376 on the 4th before going back up again.  But it then finished the week ending the 13th on 1.0368, so clearly this was a bit of a battle in both directions.


But just two weeks later it was finishing off on a Friday night with an exchange rate of 1.0616, its highest rate for the whole month.  This was clearly good news, and even though it dropped back to 1.0538 to close out the month as a whole, it was still better than it had seen in a while.


Looking forward 

So there we have it – a snapshot of what was happening in the currency markets during November.  Whether things will progress in the same vein for the final month of the year just remains to be seen, but we will of course be back in early January to tell you exactly how things panned out for the remainder of 2009. The US dollar hasn’t been at its strongest in recent weeks, this much is certain.  But at least the results haven’t been dire.  They could have been much worse than they have been, and it will be interesting to see how it progresses into the New Year when 2010 finally gets underway in the currency markets. The Euro has also had a good month against the British pound, although there is no guarantee this is the beginning of a continuing trend.  The onus always seems to be on the Euro to be the stronger of the two currencies, but this isn’t necessarily the case. This is why some healthy speculation is good at this point, as we look ahead and wonder what we will be reporting on next month.  Will we be saying the Euro has had a better month than the US dollar?  Perhaps the British pound will surprise us with a healthy fight back against these two currencies? 

Whatever happens you can be assured that we will report back on the best and most exciting news in the currency markets as 2009 finally comes to an end.  It seems strange to tell you we shall be back with another report next year, but that is exactly what we will be doing.  So we’ll see you in 2010.