Sterling falls against dollar as traders react to disappointing UK data
Sterling took a tumble on Friday as the US dollar strengthened and currency traders reacted to a slew of disappointing economic data from the UK.
The pound was down 0.6% against the greenback at 1.239 and 0.3% lower versus the euro at 1.168, as shrinking construction and manufacturing output pointed to a slowdown for the British economy.
However, sterling's slide was good news for the FTSE 100 Index, causing the London market to swing back into the black and close up 46.17 points to 7,349.17.
Multi-nationals reporting in US dollars or euros benefit when the pound suffers, while blue-chip oil majors were also enjoying an uplift from a jump in the oil price.
Royal Dutch Shell B and BP were up 38p to 2,245.5p and 5.9p to 470.4p respectively, as Brent crude rose 0.6% to 55.24 US dollars a barrel.
The price of oil climbed as investors factored in a possible disruption to Middle East production following the US missile strikes in Syria.
Russia has accused the US of violating international law after President Donald Trump unleashed the barrage of cruise missiles on a Syrian air base in retaliation for the regime's use of chemical weapons.
The president said the dramatic strike from US warships in the Mediterranean was in the "vital national security interest" and the US had to "prevent and deter" the spread and use of chemical weapons.
The slide in sterling came after f igures from the Office for National Statistics (ONS) showed construction output was shy of expectations, falling by 1.7% in February, down from a revised reading of 0% in January.
Industrial production output also fell short of economists' predictions, recording a monthly drop of 0.7% compared to a decline of 0.3% the month before.
The UK currency deepened its losses against the US dollar later in the session when traders drew encouragement from the latest US jobs report, which showed the unemployment rate had fallen to a 10-year low of 4.5%.
Across Europe, Germany's Dax was marginally down, while the Cac 40 in France rose 0.3%.
In UK stocks, precious metals miner Randgold Resources was in the ascendency, rising 305p to 7,410p, after demand for gold picked up pace following the US military action in Syria.
Away from the top tier, the troubled toymaker Hornby soared more than 4% after it said the first stage of its turnaround plan had been completed.
Shares were up 1.5p to 32.3p, with the troubled toymaker showing early signs of a recovery after issuing a string of profit warnings on the back of falling sales.
The Scalextric-to-Airfix firm, best-known for its model railways, has embarked on a painful turnaround, which has seen it reduce product ranges and cut back on investment as part of plans to shore up the balance sheet.
Hornby said on Friday that it has restructured its UK and European operations, resulting in "structural improvements to the cost base".
The biggest risers on the FTSE 100 were Randgold Resources up 305p to 7,410p, Standard Life up 12.9p to 368.7p, Sainsbury up 7.4p to 261.8p, Burberry up 46p to 1,773p.
The biggest fallers on the FTSE 100 were easyJet down 17p to 1,043p, Lloyds Banking Group down 0.6p to 63.02p, Shire down 41p to 4,562.5p, Hikma Pharmaceuticals down 15p to 1,884p.