GBP Regains Strength Pushes FTSE Down

UK shares fell as the pound gained strength against the dollar following Donald Trump’s inauguration speech.

Concern over Mr Trump’s protectionist comments hit the US currency, and the pound hit a one-month high against the dollar, rising 0.6% to $1.2450.

As the pound rose, the stock market fell, with the FTSE 100 down 27.39 points at 7,171.05 by late morning.

A stronger pound can hurt multinational firms, as overseas profits are worth less when converted back into sterling.

The biggest faller in the FTSE 100 was bookmaker Paddy Power Betfair. Its shares dropped more than 3% after it said revenues had been affected by a run of “customer friendly” results.

The company said football results in December and Donald Trump’s surprise US election win had cost it about £40m in the final quarter of 2016.

Shares in Bovis Homes rose 3.3% following a report that a key shareholder in the housebuilder has written to rival Berkeley about the possibility of a merger. Berkeley shares were up 1.1%.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza