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That link between the FTSE 100 and GBP/USD

Sure, we all know that the FTSE100 moves with the GBP/USD rate, the FTSE250 not so much. But it’s still a subject that a freelancer can roll out again every couple of years on a different site:

One of the stylised facts – stylised here meaning just ‘something that happens’ – about the London markets is that the FTSE 100 index falls when the pound rises on the foreign exchanges.

Equally, the opposite happens: when the GBP/USD rate falls, the Footsie rises.

To a certain extent this also happens with the GBP/EUR rate. Again, this also happens to a lesser extent with the FTSE 250. As with anything that happens with some regularity in financial markets there’s a reason for this too.

1 thought on “That link between the FTSE 100 and GBP/USD”

  1. There was a journalist who wrote a financial advice column for years in, I think, the New York Times. When he retired he said that there are a few eternal truths that a financial adviser preaches. The challenge is to keep repeating them in different words so that the editor doesn’t notice.

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