Healthy manufacturers boost sterling and the FTSE 100
A strong set of data from the UK and the Eurozone have pushed up the value of sterling against the dollar, with the FTSE 100 benefiting as well.
The manufacturing purchasing managers’ indices (PMIs) were strong across Europe as the sector continues to expand healthily.
Sterling had dipped at the end of Asian trading against the US dollar, but the stronger picture from closely watched economic indicators pushed it to a 0.51 per cent gain at the time of publication.
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Meanwhile sterling took 0.46 per cent from the euro, which was flat against the dollar.
Despite the sterling strength the FTSE 100 rose by more than half a per cent at the time of publication, and markets on the continent reacted very positively to the strongest manufacturing expansion since 2011, with Germany’s Dax gaining almost one per cent, while France’s Cac 40 rose by more than 1.2 per cent.
The FTSE has been helped in part by gains for pharmaceuticals companies, after Donald Trump pledged to deregulate the sector, despite his previous aversion to high pharma prices.
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London’s stocks have suffered since mid-January after recording the longest continuous streak of highs in the face of a persistently weaker pound. However, the pace of the losses has slowed.
Chris Beauchamp, chief market analyst at IG, said: “The volatility of the past couple of days seems to have given way to some fresh buying, although the presence of the Fed meeting on the calendar today could result in some hesitancy.”