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A Rolls Royce Trent 1000 turbofan engine is seen at an event to mark the arrival of a British Airways Airbus A380 at Heathrow Airport in London, England, on July 4, 2013.
justin tallis/Agence France-Presse/Getty Images
The pound rallied against the dollar on Tuesday, a move that put pressure on the top U.K. stock market index, which relies on overseas revenue.
The pound GBPUSD, +0.71% traded at $1.3470, easily breaking through the $1.34 level as it traded above Monday’s $1.3368.
The move was more of a dollar weakening story, as other currencies, including the euro and the Mexican peso, also advanced vs. the greenback.
There were positive data on the U.K. side, with the manufacturing purchasing managers index for August just a tick beneath the flash reading, coming in at a 30-month high of 55.2 in August. Any reading above 50 indicates improving conditions, and the U.K. manufacturing PMI was above that of any of its major eurozone rivals.
The strength of the pound took its toll on dollar earners, with travel stocks also getting hurt. Engine maker Rolls-Royce RR, -10.28%, British Airways owner International Airlines Group IAG, -7.76%, and GKN Aerospace owner Melrose Industries MRO, -5.26% each slumped. The FTSE 100 UKX, -1.31% was the worst performing stock-market index in Europe, shedding 1.4%.
According to FactSet, FTSE-100 companies recorded slightly more revenue in the U.S., at 25.5%, than the U.K., at 22.8%.
Gold and silver producers, however, rose, with Fresnillo FRES, +5.82% and Polymetal International POLY, +2.71% gaining ground.
