Brexit Fears and Weak Dollar Push FTSE to Poor Quarter

Sunday, 1st April 2018

The FTSE 100 was the worst performing major market index for the first quarter of the year, a sharp turnaround compared to 2017, which saw it soar to record highs on 12 different occasions. This quarter, it shed more value than in any other quarter since the recession in 2009, which saw an 11 percent decline in the first quarter of the year.

Other markets have also been struggling. Asia and the USA have seen some subdued performances as well, but none as poor as the FTSE 100, which has seen several factors combine to drag the index down.

The lack of progress regarding a trade deal for post-brexit is a particularly serious issue and one that is weighing on the minds of investors. Some firms with UK operations are holding off on investment until the trade issue is resolved, and this has led to a dampening of the mood. In addition, the FTSE 100 tends to move inversely to the dollar, because of the number of companies that take their earnings in dollars, so recent US weakness added to the difficulties for the UKs main market.

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