FxWirePro: Pound weakens amid record high in FTSE 100

The United Kingdom’s benchmark stock index FTSE100 opened at a record high today as the weakness in the pound boosts investors’ bet on the companies benefiting from increased exports. After reaching 1.24 against the dollar on last Thursday, the pound has declined to 260 pips in last two days, currently trading at 1.214 against the dollar. FTSE, on the other hand has risen more than 8 percent since December and reached a new record high.

We have forecasted for the pound to reach towards 1.2 against the dollar in the current run. Two of our forecasted target at 7100 and 7220 got reached for the FTSE100; we expect the next major target to be 7700. However, it might take a longer horizon of time to reach the above target.

A major caution other than the negotiations between the UK government and the European Union is the monetary policy from the Bank of England (BoE), which has signaled in its last meeting that the probability of a rate cut is equal to that of an increase.