Home Business NewsBusiness FTSE 100 up as pound sinks against the dollar

FTSE 100 up as pound sinks against the dollar

by LLB Reporter
30th Aug 22 10:55 am

The FTSE 100 started on the front foot after the Bank Holiday, having careered into the long weekend with some substantial losses after Federal Reserve chair Jerome Powell’s hawkish speech at the Jackson Hole summit.

It helps that US stocks have stabilised to some extent in the interim. Unsurprising given that many expected Powell to pour a dose of cold water on the idea that a so-called ‘dovish pivot’ was on the way.

Helping the FTSE 100 is strength in the dollar relative to sterling – will forex traders be eyeing the possibility of parity between the pound and its US counterpart? A similar fate to that which befell the euro recently.

AJ Bell investment director Russ Mould said: “It would take a big move to get there but as the energy crisis continues to grip the UK it doesn’t feel like a scenario where you could rule anything out.

“Putin’s use of Russian gas supplies as a proxy front in the current conflict with Ukraine continues to add to the supply pressures in the energy market and ramps up the pressure as winter starts to approach.

“A weak pound is typically good news for a FTSE 100 index which is heavily dominated by overseas earners.”

“Posh wellies seller Joules’ latest update – effectively decrying media reports that an agreement with Next for the larger retailer to invest in the business was breaking down – shows the desperation of its situation.

“Businesses like Joules, which are neither luxury brands nor bargain basement propositions and sell discretionary items, look particularly vulnerable against a highly squeezed consumer backdrop.”

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