FTSE 100 reaches record high as pound sterling drops to 2018 low against dollar

The US and China have relaxed their stance on tariffs, easing fears of a potential trade war

The FTSE 100 reached a record high on Monday, adding 0.9 per cent to move past 7,840 for the first time ever, as sterling tumbled to its lowest level against the dollar since the start of this year.

Investment group 3i led FTSE risers, while Russian steel-maker Evraz, owned by Roman Abramovich, was the biggest faller.

Experts said the FTSE’s surge was largely due to investors’ relief at the easing of tensions between the US and China. The brewing trade war between the two economic giants, sparked by tariffs announced by Donald Trump, was said to be “on hold” over the weekend after the two nations agreed to a strategy for reducing the US’s deficit with China.

The dollar strengthened as a result of the more conciliatory tone the countries have adopted, with the pound dropping to a 2018 low against the greenback on Monday morning.

Meanwhile, Connor Campbell, financial analyst at SpreadEx, said Brexit has re-emerged as a “value-eroding weight for sterling”, which also helped push the FTSE 100 upwards.

“Tensions within Theresa May’s cabinet over the customs union, and rumours of a potential vote of no confidence in the prime minister and subsequent snap election, have helped extend the pound’s miserable spring showing,” he said.

Analysts said traders will now be targeting the FTSE 100 at 8,000.