U.K. stocks were rising for the first time this week on Wednesday, getting a boost from a weaker pound and a rally for miners.
The FTSE 100 UKX, +0.26% climbed 0.4% to 7,310.82, set to break a two-day losing run.
The gain “can be derived from a hawkish Fed Chair Yellen (and colleague Bostic) supporting continued gradual rate hikes (market implied probability of Dec rate hike now 70%),” said analysts at Accendo Markets in a note.
“This has firmed the USD to the detriment of GBP and EUR, but to the benefit of the both benchmarks’ internationals/exporters,” they added.
Sterling GBPUSD, -0.4755% fell to $1.3383 from $1.3460 on Tuesday, and fell further below the $1.36 level the currency hit earlier in September. The rally earlier in the month — when the pound rose to the highest level against the dollar since the Brexit vote in June last year — came after hints from the Bank of England it was preparing to raise interest rates in coming months.
However, over the last week the U.S. Federal Reserve has signaled it will lift rates again in December, sending the dollar higher. On Tuesday after European markets closed, Fed Chairwoman Janet Yellen reaffirmed expectations for a rate hike later in 2017, saying it would be “imprudent” to leave monetary policy on hold until inflation hits the central bank’s target.
Stock movers: Miners were among the biggest advancers in London on Wednesday, rising alongside higher copper prices HGZ7, +0.63% . Shares of Anglo American PLC AAL, +2.22% rose 1.9%, Rio Tinto PLC RIO, +1.64% RIO, -1.00% RIO, +1.44% added 1.7% and Antofagasta PLC ANTO, +1.70% picked up 1.7%.
Not all metals prices rose, however, and gold GCZ7, -0.77% fell 0.5%, dragging precious-metals miners lower. Shares of Randgold Resources Ltd. RRS, -1.20% GOLD, -2.44% lost 0.9% and Fresnillo PLC FRES, -0.84% fell 0.2%.