Is The Post-Brexit Rally For Real? FTSE 100 Index Might Indicate Just That

The country's stock exchange saw a massive selloff last Friday and Monday after the Brexit vote in which the people decided the country's best prospects moving forward is independence from the European Union. The historic first-of-its-kind vote created panic and uncertainty and a sea of red in the stock market — but that didn't last very long.

The FTSE 100 index began rebounding on Tuesday, as investors were buying U.K.-based companies that benefit from a stronger U.S. dollar. In fact, the index briefly hit a new 2016 high on Friday before returning some of its daily gains.

Bank Of England Eases Concerns

The Bank of England's Governor Mark Carney said on Thursday that the country's central bank would need to oversee additional stimulus into the economy over the summer to help boost the now fragile economy in the new realities and uncertainties of a post-Brexit vote.

Related Link: Just How "Safe" Are U.S. Stocks Post-Brexit?

The country's interest rates have been steady at 0.5 percent for more than seven years and could now fall even further.

Mitul Patel, the head of interest rates at Henderson Global Investors, told The Guardian, "The market now expects interest rates to fall to close to 0 percent, and while Carney has previously stated a dislike of negative interest rates, nothing can be taken off the table."

However, the central banker's comments of a possible rate cut sent the British pound lower to $1.3284 U.S. dollars — within striking distance of the post-Brexit lows of $1.3121.