Summary Of World Currency Markets For October 2009

Monday November 9, 2009

Here we are again with a fresh look at what happened in the world currency markets last month.  Last time we saw some interesting changes all in all, and in particular the US dollar did not have a resoundingly successful month.  Mostly though it gave us some interesting results but nothing particularly stunning or devastating.  That perhaps is a blessing.


For example the US dollar managed to make a miniscule difference against the British pound for the whole of the month.  The change it made did go in its favour, but in total it only managed to add on a tiny 0.0034 over the course of the entire month.  The story was rather different if you were keeping an eye on your currency converter results between the US dollar and the Euro though, since the dollar lost out on 0.0177 in total there.


The US dollar was clearly having a few problems since the Japanese yen and the Hong Kong dollar also managed to get the better of it.  So what will happen this time around?  Will the US dollar find a way to make a comeback and manage to improve on the results it had last month?  Or will those results we saw previously turn out to be the start of a downward spiral? 


Whatever happens it is clear that the US dollar didn’t have the best time when we last checked in with it.  But can it change that now?  Let’s take a look and see what results it managed to bring in during the month of October.

An overview of the currency markets during October How is the US dollar doing now? 

Last time we saw the US dollar coming to a close against the British pound with an exchange rate of 0.6209.  That was achieved after a tiny increase of just 0.0034 all in all.

The rate we were left with after the first day of trading that month was 0.6264, so things were already going in the right direction.  And since the next day followed that up by ending on 0.6309 – which took us into the weekend – it certainly looked as if things were on the up for the US dollar.


Appearances can be deceptive though, and as soon as the markets came back the following week the dollar slid back slightly to 0.6274.  There were no real huge differences to report that week either, but by the time Friday night rolled around the exchange rate between the two was standing at 0.6256.  So the British pound had come back and managed to beat the dollar back down again.  This could turn out to be another fascinating month between these two currencies.


So what happened next?  Well, when the dollar pushed back and finished on Monday night with an exchange rate of 0.6321, it looked as if the tide was turning back in that direction again.  But one day is just the start of a new week, and as it turned out there was plenty more to come yet.


Tuesday turned out to be the peak amount for the week at 0.6329, and from then on the British pound fought back and gradually beat the US dollar into submission – or at least something resembling it.  And by Friday evening when everyone was heading home for the weekend, the exchange rate had fallen to just 0.6131.


So was this going to be another disappointing month for the US dollar against the British pound?  It looked increasingly as if it could be, and if it was going to turn out like that it was possible that it could go the same way elsewhere too.


But let’s not get too far ahead of ourselves.  The Friday that resulted in that exchange rate of 0.6131 was the 16th October, so we were still only halfway through the month.  The 19th brought another slight change by the time everyone headed home, to 0.6128.  This was only very slight and while it did not go the way the dollar would have liked, it did not give undue cause for concern.


The 20th saw the exchange rate drop further to 0.6089 however, and the day after that it changed again to 0.6032.  It was almost as if something spooked the dollar into action however, because after that the two remaining days of the week went well.  The following day saw an improvement to 0.6035 and the final day of the week improved things a little further to 0.6106.  Was this the start of a comeback that would see the whole month go in favour of the US dollar at last?


Monday 26th gave us a more positive figure to look at too, since the dollar finished that day on 0.6121.  These were only tiny changes but if they were heading the right way that was all that mattered.


Unfortunately from then on things started to dip in the opposite direction and by the end of the week the dollar was sitting on 0.6038.  That was the final exchange rate for the month, so that meant the US dollar had lost out on a total of 0.0171 for the month as a whole. 


Disappointing, but let’s move on to see whether it could do better against the Euro.  It lost a similar amount against that currency last time, leaving it to start on 0.6829 this time.


The exchange rate dipped below the 0.68 mark on the 6th of the month, going down to 0.6792, but it went back up to 0.6805 the very next day.  Things didn’t stay like that though, as the week finished on 0.6779 and it would prove to be the last time for a while that a figure of 0.68 or above would be enjoyed on the currency converter by the US dollar against the Euro.


As soon as things got going again the following week the dollar dropped again to 0.6772, swiftly followed by another fall to 0.6727 the next day.  It finished that week on 0.6725, so there was very little cause to celebrate just at the moment.  What the rest of the month would produce was anyone’s guess, but if there was a pattern beginning to emerge concerning the US dollar against the other world currencies, it wasn’t looking like a good one.


On the 22nd the rate dropped to 0.6666 and the following day that fell again to 0.6657.  That was how that week finished and although things started to pick up again the following week the month as a whole would end up finishing on 0.6756 for the US dollar against the Euro.  All in all then it had lost out on less than a cent, but the onus was still on the Euro.


The Hong Kong dollar won against the US dollar by a very small amount last month, leaving it on 7.7501 at the end of September.  But could the US dollar do anything to win a good result this time?


Well if you were to look at a chart of the results between these two currencies you would see a markedly different one to the one produced by the US dollar against either the pound or the Euro.  This one was going up and down quite regularly throughout the month, which produced results in the 7.75 and 7.74 region, although the vast majority were over the 7.75 mark to some degree.


The final exchange rate of the month between these two turned out to be 7.7501, which was actually exactly the same as we’d seen just one month earlier.  Perhaps this was something of a relief for the US dollar, given the two other results we have seen so far.


Let’s move on then to see how things progressed with the Japanese yen.  The dollar had finished on 89.510 last time with a loss of 3.749 in total.  Could it win some of that back now?


The first figure back on the 1st was 89.951, so at least the dollar started by going in the right direction.  But it finished the week on 89.392, so it was anyone’s guess as to what would happen next.

 Things did dip down as low as 88.369 on the 6th, before heading back up again and never going that low again.  By the end of the month the US dollar was standing on 90.986, and while that wasn’t the best exchange rate it had managed (which was 92.046) it was still better than it had started the month with.  All in all it had added on 1.476, which was definitely something to celebrate. 

Meanwhile, over in Europe…


So how did the Euro do against the British pound last month?  The starting point was 0.9093, and after an increase of 0.028 last time could it add on even more this time too?


Well it did start out on the right track and even went up to 0.9408 on the 13th, but that luck didn’t hold out and by the end of the month the exchange rate stood at 0.8937.  So all in all it was the British pound that came out on top last time, with the Euro losing out on a total of 0.0156.  It makes a change for the British pound to come out on top though, so it will be interesting to see if that can happen again next month.   

Elsewhere last month…


This is the part of our report where we look elsewhere to see if there were any other notable tussles going on in the world of currency last month.  Australia versus New Zealand is always well worth a look, and this month was no exception.  You just never know what you will find here. 

On the 1st October the Aussie dollar was bagging a total of 1.2177 New Zealand dollars.  But although that dipped down to 1.2089 on the 6th of the month, it wasn’t long before it was on the way back up again.  And in fact that figure turned out to be the lowest figure we would see for the whole month.


Even though the graph did have some dips and troughs in it throughout October, they never posed any real problems for the Aussie dollar.  And indeed by the end of the month the exchange rate had changed to 1.2502.  That meant it had put on more than three cents since the first day of the month, so it was a resounding success for the Aussie dollar, and not so good for the Kiwi dollar.


Let’s look at the Hong Kong dollar now against the Japanese yen.  There were a few highs and lows here all in all, but by the time the month was over the success story was that of the Hong Kong dollar.  From claiming 11.606 on the 1st of October it had gone on to claim 11.739 by the end of the month.  It wasn’t a big difference but it was enough to feel that the month had been a good one for the Hong Kong dollar, after drawing as it had against the US dollar.

Looking forward  

So perhaps it wasn’t the best month for the US dollar, but all in all we had some interesting results to look back on.  The question now, as always, is whether those same trends will continue through next month as well, or whether they will change and give us a new picture to look at. 

As always of course we will be here to give you all the answers, and to tell you how the US dollar is performing on the world stage.  Even though the global recession is coming to an end in some countries, it is still affecting much of the globe and this can be readily seen in many of the exchange rates at present.


So let’s look ahead to the next month and wonder whether we will see some spectacular results for November, or whether it will be much the same as we have seen this time.  We’ll have to wait to get the answers.