This week has been a momentous one here in the office at Accendo. Tuesday saw the UK 100 break above the 7000 point barrier for the first time since 2015 and close the session at all-time highs.

You may be saying to yourself something along the lines of: “Oh no! I missed the chance to get involved while the UK Index was rising; there’s no point of investing now!” Fear not, however, as despite reaching a new landmark, the index still has plenty of room to continue to posting gains throughout the remainder of the year. And beyond.

Currently, 8 UK 100 listed companies are trading at fresh all-time highs, whilst a further 16 are still trading below the price they were on 7 July. This just goes to show the huge amount of manoeuvrability still available for the index constituents to bring in share price increases in the coming weeks.

Importantly for the UK 100 , Cable (the Sterling/US Dollar exchange rate) is at 31 year lows. Why is this so significant? It’s estimated that 70% of UK Index constituents’ earnings come from overseas, with many UK Index blue chips selling US Dollar denominated wares. Sectors that tend to outperform amidst a weak pound are mining, due to precious metals’ dollar denomination, and pharmaceuticals, thanks to their defensive, largely exportable and inherently global nature. Finally, a weak pound raises the possibility that a merger or acquisition of a UK-based company might occur as foreign investors take out their chequebooks and look to our economy for a bargain in the current currency climate. We’ve already seen ARM Holdings snapped up by the Japanese at a whopping 40% premium.

Furthermore, there’s potential for Cable to fall further. In the immediate future, a possible rate hike from the US Federal Reserve would help the US Dollar to strengthen further against Sterling. Looking towards 2017, the long-term impact of Brexit and the lack of available details surrounding the form in which the EU exit will take (a soft one with continued access to the single market area or a hard, full exit from the Eurozone) could both have a detrimental effect on currency, therefore raising profitability for a large majority of the UK 100 .

To put it in the simplest of terms, the UK 100 looks like it may well continue on its foray above 7000 points for the long haul.

With the plethora of macroeconomic data that comes in every day that could impact those all-important foreign exchange markets, it can be hard to filter out the noise. We’re here to help you make sense of the wealth of data coming in over the fourth quarter so that you can make a confident and informed decision when trading.

Our research team identifies the key events during the day that could impact markets in the short-term, as well as the wider economy, in our ‘Macro Calendar’ publication. Similarly, our ‘Index Focus’ publication identifies the movement of major world indices as well as monetary policy sensitive gold, allowing you to stay up to date with the latest market movements. Why not get access to our research and see how you quickly can improve your trading performance.

Matthew Grice, Trader, 7 October