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FTSE 100 Live: Miners lead stock rally; Pound holds onto gains

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Good morning and welcome back to the City PM liveblog.

Is President Donald Trump trying to devalue the dollar?

That’s the question many in the City and across global markets were asking yesterday after Trump referred to the dollar dropping 1.3 per cent against a basket of currencies as “great”.

The President’s triggered another 0.2 per cent fall on Wednesday morning, taking the greenback’s losses to near 10 per cent over the past year.

Amidst the dollar woes, the pound has rallied to levels not seen since September 2021, before storming onwards to the $1.38 mark.

Lee Hardman, senior currency economist at MUFG, said: “The loss of confidence in the US policymaking has triggered renewed fears over currency debasement.”

Debasement trade refers to an investment strategy where market participants sell the US dollar and Treasury bills to buy assets such as gold or silver because they fear government policy is eroding the currency’s value. In the case of the dollar, economists have raised questions about whether Trump is intentionally weakening its value.

Hardman said Trump’s fresh comments “reinforce the impression amongst market participants that the Trump administration wants a weaker US dollar to support the manufacturing sector by improving external competitiveness.”

Still the dollar enjoyed a 0.3 per cent bump in later trading after US Treasury Secretary Scott Bessent insisted that the US was still pursuing a “strong dollar policy” and tensions flared up over Iran.

Trump sent a warning to Iran with a threat of military intervention after Tehran rejected holding negotiations against a backdrop of threat.

Trump did not rule out attacking Iran in the wake of its crackdown on protests this month.

The unrest sent oil prices on the march, with a barrel of brent crude at $68.01 when London markets closed, up from 65.92 late on Tuesday.

We’ll be bringing you the latest on this and more over the course of the morning.

Here’s a few of our top stories from yesterday: