Pound takes a pounding

Although most major currency pairs traded listlessly as summer came to a close, the British pound managed to send a few sparks flying as it tumbled in value relative to other major currencies. It reveals the three largest percentage moves (on a closing-price basis) in the major currency pairs from Aug. 2 through Sept. 15 came at the pound’s expense, with the pound trading around $1.78 U.S. in mid-September. The euro was the greatest beneficiary of the pound’s weakness, with the euro/British pound (EUR/GBP) rate rallying nearly 4 percent. In late September the market was meandering just below the level of its March 12 high.

It shows the EUR/GPB has essentially traced out a more volatile trading range than most other currency pairs, especially those involving the Japanese yen; the USD/JPY and EUR/JPY rates were especially moribund from mid August through mid-September.

It shows one exception — the British pound/Japanese yen (GBP/JPY) rate. The pound lost almost as much (-3.38 percent) relative to the yen as the Euro gained against it in August and the first two weeks of September. Similar to the situation, the pound bounced a bit after slightly exceeding (but not closing below) the June 24 low. After the brief rally to a high of 198.60 on Sept. 13, however, the GBP/JPY rate pulled back and began to consolidate.