FTSE benefits from special FX

Chris Beauchamp IG

Heading into the close, the FTSE 100 is 30 points higher, lifted by currency weakness and good Vodafone figures.

Decent end to the week for FTSE 100
Tech earnings take centre stage next week
Fed/BoJ also command attention

FTSE traders will be giving thanks for the joys of a weak currency this afternoon, as the index rises 0.4%, while those in the US and on the continent sink. A dire set of PMI numbers for the UK, which will be taken by those once in the 'Remain' camp as evidence of the dire impact of the Brexit vote, caused the pound to shed much of the (admittedly limited) ground gained in the past week. The data, plus the implication that the BoE will look to ease policy, has hit sterling hard. That helps to explain why the FTSE 100 has managed to end the week on a high while others fall. Should this sterling weakness extend into the final week of July and into August ahead of the next BoE meeting, then the form of recent weeks, where international shares that pay healthy dividends outperform, should persist. One such dividend payer would be Vodafone, which has managed to point towards heady growth outside Europe, soothing concerns about a possible slowdown across the Channel.

Next week is relentless in terms of newsflow, with economic, corporate and central bank announcements coming thick and fast. Earnings season continues to surprise to the upside, which has helped US markets avoid a sudden plummet to earth after touching new all-time highs this week. Tech names take over next week, which promises to make life interesting for the Nasdaq. Meetings at the Fed and the Bank of Japan will also be key, after a period in which both the Bank of England and the ECB opted to hold fire.

Author

Chris Beauchamp

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