FTSE 100 shares to buy as the GBP/USD meltdown gains steam

The FTSE 100 index came under intense pressure as the GBP/USD crashed to the lowest level in more than 37 years. It was trading at £7,274, which was about 3.27% below the highest level this month. A weak pound will have negative impact on many FTSE 100 constituent companies. Here are some of those that could benefit in the index.

Shell and BP

Shell (LON: SHEL) and BP (LON: BP) are two energy companies that could benefit from the crashing British pound. They are the biggest energy companies in the index. As such, they will benefit from the relatively elevated oil and gas prices.

Are you looking for fast-news, hot-tips and market analysis?

Sign-up for the Invezz newsletter, today.

Most importantly, these companies deal with commodities that are traded in the US dollar. They also generate most of their cash outside the UK. Therefore, a falling sterling means that these companies will report more revenue and profits in the coming quarters. 

Therefore, Shell and BP share prices will likely continue doing well supported by elevated prices, strong international demand, and a strong US dollar. 

Ashtead Group

Ashtead Group (LON: AHT) is a leading equipment rental company that operates in the UK, Canada, and the United States. Its most well-known business is known as Sunbelt Rentals, which normally competes with companies like United Rentals. Ashtead share price has crashed by over 30% this year.

However, a strong US dollar could be a catalyst for the stock. For one, while it is primarily a British company, Ashtead makes most of its revenue in the UK. In 2021, its US operations brought in more than $6.4 billion in the US compared to 726 million pounds it made in the UK.

Therefore, Ashtead stock price and earnings will be boosted by a strong US dollar. Moreover, demand in the US is expected to rise as the government implements its infrastructure projects that we wrote about here.

BAE Systems

BAE Systems (LON: BA) is another FTSE 100 stock to buy as the GBP/USD crash continues. It is one of the biggest companies in the defence industry. In the US, it is a top-ten provider of key equipment needed by the military.

BAE Systems share price will benefit because of three main reasons. First, a stronger US dollar means that the company will benefit in financial reporting since it is listed in the UK. Its dividends are also in pounds. Second, the US and other countries are expected to boost their defence spending in the coming months due to the crisis in Ukraine. Finally, a strong US dollar could lead to low raw material prices.