The FTSE, the UK’s largest 100 companies by market capitalisation (defying most of the doom-mongers’ predictions) makes a new all-time high to trade up to 7884.  Indeed, given the landscape that the UK is facing at the moment, the out performance to the upside is even more impressive. Brexit negotiations with the EU arguably aren’t progressing at the speed many in Westminster would like and growth in Britain is lower than amongst other G10 nations. Yet even with these issues, the FTSE is up by just under 1000 points since the late March draw down.

How is this the case? If we look a little closer at the details, despite media predictions of poor negotiations with Europe over Brexit, materially, nothing has yet changed for Britain in the short term. At this moment, we are still in the EU operating under the same free trade rules we had been previously. In addition, it’s likely the negations will have an official extended period.  Also, the composition of the FTSE is key and the relationship with FX movements. Watches Replica

The largest capitalisation equities within the FTSE, even though they may have their operation base in the UK, make a large amount of their revenue from operations outside the UK – meaning with Sterling on a relative basis, it is weaker, certainly against the US dollar. This in turn aids profits for these respective companies. This for me is the key driver of the latest move higher in the FTSE.  Going forward, the upward momentum and weaker currency is likely to continue and I wouldn’t be surprised to reach 8000 before the summer end.

Chief Trader,

Jordan Hiscott


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