Pound on best run since 1971 as FTSE 100 claws back gains
The pound and the FTSE 100 continued their strong runs on Tuesday on the back of US instability.
Sterling was on track for its 11th day of gains, which would be its longest streak since January 1971 – when the currency switched to the decimal system.
It was up 0.6 per cent to $1.34 against the dollar, an increase from $1.25 at the start of the year.
Downturns worsened for the greenback which fell to a three-year low on Monday.
The DXY index, which tracks the US currency against a basket of foreign currencies, was down over one per cent, falling to 97.93, the lowest since March 2022.
Bank of England policymaker Megan Greene told Bloomberg TV on Tuesday morning: “If the dollar continues to depreciate on balance that would be disinflationary for the UK.”
Meanwhile, the FTSE 100 scraped back some gains in early trading, as it clawed its way towards pre-tariff trading levels.
Should the FTSE 100 close in the green, it will mark its best run in two years with seven days of consecutive gains.
Trump’s ‘Liberation Day’ levies had the blue-chip index down over 1,000 points to lows of 7,679.48 in the week that followed.
While the President’s 90-day pause rallied the index it has yet to make a full recovery.
FTSE miners rally as gold surges
Supermarkets Sainsbury and Tesco were among the top risers on Tuesday morning each climbing near three per cent.
As investors flocked to gold for stability after Trump’s criticism of the Federal Reserve continued to shake the dollar, miners rallied.
FTSE 100 stocks Endeavour and Fresnillo were up over two per cent and one per cent.
Hochschild Mining, which is listed on the FTSE 250, was up near five per cent.
This came as gold hit $3,500 for the first time as US confidence began to crack.
Trump’s scaling up of attacks on Fed Chair Jerome Powell has done little to calm investor nerves.
Russ Mould, investment director at AJ Bell, said: “Persistent comments from President Donald Trump, which put the independence of the US Federal Reserve in question, resulted in weakness in the dollar, US Treasuries and Wall Street overnight.
“If the administration is able or willing to follow through on its threat to fire Fed chair Jerome Powell before his term is up next year, it could provoke an even stronger reaction amid fears about the implications for inflation.
In a post on Truth Social last week, Trump said Powell was “always TOO LATE AND WRONG” and added his “termination cannot come fast enough”.