Published: Wed, October 12, 2016
Economy | By Melissa Porter

Dollar leaves rivals for dust, FTSE hits record high

Dollar leaves rivals for dust, FTSE hits record high

The fall in the pound has boosted the FTSE 100 as numerous companies in the index generate most of their revenues overseas.

Reuters reports that in Asian trading, sterling turned out to fall as low as $1.138, although the number was later revised and altered to $1.149, still marking a new 31-year low.

The FTSE 100 briefly reached a new record high value today, touching 7,129.83, surpassing its previous April 2015 peak of 7,122.

"Brexiters might point to the FTSE's rise as a sign of strength but this is very much a story of sterling weakness boosting foreign earnings - which account for around two-thirds to three-quarters of FTSE 100 company revenues", he said.

Sterling dropped more than 0.8% to trade as low as 1.225 against the U.S. dollar on Tuesday.

Sterling took a hit after leaked Government papers laid bare the cost of leaving the EU.

While the pound has tanked following the June vote to leave the European Union, most of the FTSE 100 stocks have surged. The eurozone economic sentiment gauge climbed 6.9 points to 12.3 points while the current situation index for Germany rose 4.4 points to 59.5, the highest reading since January.

But some argue the FTSE's fillip just comes down to a weak pound.

The irony of the pound's dramatic fall is that it will help British businesses secure market share in the EU's single market, of which Britain is still a member until at least 2019, by making their goods more competitive. The last time the Footsie was at this level was in April a year ago, when it reached 7,122.74 points during trading before falling back slightly to finish at a record closing high of 7,103.98.

Away from the top tier, shares in Ted Baker closed 4.7% higher after the fashion chain shrugged off tough high-street trading to post a 20.5% leap in pre-tax profits to £21.5 million for the six months to August 13.

The energy-heavy benchmark FTSE 100 index has also been buoyed by Monday's rebound in oil prices.

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