Weak pound propelling FTSE 100 higher even with Grocery M&A

30.04.2018 / 11:57

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Sainsbury's GBP7.3b purchase of Asda to create a U.K. supermarket giant is definitely helping lift the FTSE 100 today in a little-changed market. But it's a weak pound that's providing support for the benchmark's best month since at least 2013.

The pound has been pressured this month by weak economic data, declining expectations of a May rate hike and gathering strength in the dollar. A retreating pound is generally a boost to export-dependent FTSE members and the negative 30-day correlation has been increasing steadily this month. Next week's BOE inflation report and rate decision could be key to framing market expectations and whether stocks will prove to be a hedge against a possible terrible summer for sterling.

Source: Bloomberg Pro Terminal

Trader Aleksandar Kumanov

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Weak pound propelling FTSE 100 higher even with Grocery M&A

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