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Pound tumbles as FTSE 100 ends higher | |
(about 9 hours later) | |
The pound sank against the dollar on Thursday as banking shares lifted the FTSE 100 higher. | |
The pound fell 1.45% against the dollar to $1.2383 as the US currency benefited from Thursday's Federal Reserve meeting, which pointed to three rate rises next year, rather than two. | |
On the stock market, bank stocks, which stand to benefit from higher rates, rose | |
The FTSE 100 closed up 50 points, or 0.72%, at 6,999. | |
Royal Bank of Scotland closed up 4.7% and Barclays closed up 2.4%, helped by Wednesday's rate rise in the US. | |
Against the euro, sterling was little changed at €1.1938. | |
"The market is whole-heartedly embracing Trumpenomics and the idea that the US economy will be on fiscal steroids in the next few years. Rates will rise and the dollar will surge," said City Index analyst Kathleen Brooks. | |
"In contrast, the eurozone is mired in problems including slow growth, low inflation and multiple political risks in Italy and France." | |
Overall, the biggest riser on the FTSE was Centrica, which maintained its earlier gains sparked by the news that it was raising its profit forecast for the year. It closed 5.5% higher. | |
The biggest fallers were all mining companies: Randgold was down 7.8%, Antofagasta down 5.2%, Fresnillo down 5%, Anglo American down 4% and Polymetal International down 3.4%. | |
They have been hit by a fall in the price of gold, which fell after the US Federal Reserve indicated more interest rate increases next year. | |
Rising interest rates are generally bad for gold which looks less attractive when savings rates are on the increase. |
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