FTSE 100 reaches record highs as Sterling hits 2018 low
By Liam Sheasby, News Editor
23 May 2018
The FTSE 100 stock market moved above 7,840 points on Monday for the first time in its history and continued to a peak of 7,877 on Tuesday as the Pound Sterling slumped to its lowest value against the US Dollar this year.
UK: with all the doom and gloom out there, FTSE 100 making new record highs pic.twitter.com/HV9vMa92Vf— Joumanna Bercetche (@CNBCJou) May 21, 2018
Relaxing tensions between the US and China over trade, as well as the potential for peace talks between the US and North Korea and no further clashes in the Middle East have all added up to a window of opportunity for the US Dollar while investors have confidence in the currency. This in turn has quashed the Pound, which leads to foreign investors taking advantage of the London Stock Market having favourable currency exchange rates on stock profits, thus the rapid rise in value for the FTSE.
London Stock Exchange update: #FTSE 100 closes at all time high, 7,877.45, +0.23%— LondonStockExchange (@LSEplc) May 22, 2018
Concerns for the UK over Brexit still stand, but limited news coverage at the moment due to a combination of the Royal Wedding and the recent violence in Israel have taken the spotlight away from the political fragility involved in the negotiation process. In this case, no news is good news, but it can’t last forever – even with a World Cup and Wimbledon approaching.
With the weakened Pound comes a price rise for gold in Sterling, gaining almost £10 per ounce in the past week and £6.24 today alone. In comparison, the stronger US Dollar has seen gold per ounce come down in value in USD slightly, but the gains in Pounds are greater than the losses in Dollars – a good sign for gold demand.
Today the FTSE 100 is trading at 7,835.53 points – down 51.07 points from yesterday’s peak, equating to 0.65% lost. Analysts are still predicting further rises, with the London exchange predicted to reach 8,000 points in the next few days.