Critical talks between London and Brussels resume today as the October 31st deadline for leaving the European Union comes into sight. Markets were steady this morning but that could change very quickly if no deal is agreed.
Brexit talks resume today between Britain and the European Union as the clock ticks down towards October 31st, the date on which Britain is due to leave.
Britain has tabled fresh proposals to try to get round the problem of the internal border in Ireland and there have been some encouraging noises from Brussels, although more needs to be discussed.
This morning, the blue-chip FTSE 100 index was 7,155.38. One month ago, on 6 September, it stood at 7,282.34 and three months ago on 8 July it traded at 7,549.27.
FTSE finds support
During the past 12 months, it has zig-zagged up and down, influenced in part by political volatility in the UK. On 5 October last year, it traded at 7,318.64, hitting a 12-monthly low of 6,594.68 on December the 27th.
For those looking on the bright side, the chart suggests two distinct trading phases during the last 12 months, with the low point of December 27th followed by steady progress back towards 7,200 by mid-February. Since then, the FTSE has found support at this level and its 12-month peak was seen on July the 29th, at 7,686.61.
The FTSE 250 index, more reflective of domestic British business than is the international FTSE, is currently trading at 19,480.37. One month ago, on September 6th, it stood at 19,705.52 and three months ago, on the 5th of July, its level was 19,655.27.
Over the past 12 months, the pattern of the FTSE 250 has mirrored that of the FTSE 100, with a sharp drop around the turn of the year followed by a recovery into a higher trading range. Its low point came was also seen on December 27th, when it touched 17,090.47, and from mid-February it started to find support at the 19,000 level.
Its 12-monthly high point came a little later than for the FTSE 100, at 20,195.75 on 13 September. The FTSE 250 is thought to be more sensitive to Brexit developments because of its UK focus. FTSE 100 companies earn about 70% of their revenues overseas. This not only shields them from domestic commercial turbulence but can mean that a weaker pound increases their profits, given foreign currency earnings are magnified when translated into sterling.
Exchange rate crumbled
Meanwhile, the pound traded at $1.2314 this morning. One month ago, on September the 5th, it stood at $1.2332 and three months ago, on July the 5th, it changed hands at $1.2528.
The chart for the past 12 months shows sterling weakness against the dollar as perhaps the main story since late Spring. A year ago, on the 5th of October 2018, it traded at $1.3116, falling briefly below $1.25 in mid-December before staging a recovery that took it to a 12-month high of $1.3315 on March the 13th.
But the rate started to crumble from mid-May onwards, to a 12-monthly low of $1.2027 on the 9th of August.
Its performance against the euro has followed a similar pattern. This morning it traded at €1.1218, and one month ago, on 5 September, it was worth €1.1177.
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Three months ago, on 5 July, it was worth €1.1159 and a year ago, on the 5th of October 2018, it was worth €1.1384.
Its 12-monthly peak was €1.17630 on 13 March hitting a trough of €1.0737 on the 9th of August.