London stocks fell on Wednesday, with dollar-earners under the cosh as the greenback slumped, as investors eyed the latest policy announcement from the Federal Reserve and earnings from three of the 'Magnificent Seven'.
The FTSE 100 closed down 0.5% at 10,154.43.
The dollar remained under pressure on Wednesday, while gold once again breached fresh records, as the Trump administration's erratic policies continued to weigh heavily on markets.
The greenback sank to a four-year low on Tuesday and continued its decline on Wednesday against a basket of currencies, having now shed 2.6% since the start of this year alone.
Tuesday's slide in the dollar, to its lowest level since February 2022, was the largest one-day drop since April 2025, when the US president unveiled his swingeing tariff regime, upending global markets.
Asked if he was concerned about the most recent fall, however, Trump backed a weaker greenback, telling reporters: "No, I think it's great.
"Look at the value of the dollar. Look at the business we are doing. The dollar is, the dollar is doing great."
Meanwhile, investors were cautious ahead of the latest policy announcement from the Federal Reserve and earnings from Tesla, Meta and Microsoft.
Emma Wall, chief investment strategist at Hargreaves Lansdown, said: "It's a big day for Big Tech as the market awaits earnings from Meta, Microsoft and Tesla later today - and Apple reporting tomorrow.
"These are the companies which can move not just their own share price but that of the whole market, and in particular the eagle eared will be listening to Elon Musk's commentary on the earnings call where more detail is often provided on financial forecasts and long-term strategy for the business."
As far as the Fed is concerned, expectations are for interest rates to remain at 3.5% to 3.75%. Wall said Chair Jerome Powell's statement may trigger volatility.
"Powell has been vocal in recent weeks about the President's plot to oust him and some market twitchers expect further comment today - potentially even regarding Powell's intentions to stay on the Committee after his term as Chair ends this year," she said.
"Technically he can stay on the Committee until January 2028, which the market will interpret as higher for longer, for even longer, interest rates."
In equity markets, the likes of GSK, AstraZeneca and Rentokil, which derive a significant chunk of their earnings in US dollars, were hit by weakness in the US currency.
Susannah Streeter, chief investment strategist at Wealth Club, said: "The pound is now at levels not seen since September 2021, touching $1.37 before falling back slightly. The sharp moves in currencies, with sterling strengthening are acting as a dampener on the FTSE 100.
"It puts pressure on the overseas earnings of listed multinationals, with pharma giants GSK and AstraZeneca, chemicals company Croda, and fashion house Burberry among the fallers in early trade."
Burberry was also knocked lower by disappointing results from French luxury group LVHM.
On the upside, Pets at Home rallied after saying that full-year underlying earnings were set to be in line with expectations despite a fall in third-quarter revenues after it cut prices as part of a plan to revive its fortunes.
British Land ended up, having dipped earlier in the day after saying it had agreed to buy Life Science Reit to ramp up its presence in the fast-growing science and technology sector.
The deal values Life Science Reit, which last autumn said it would pursue a managed wind down, at £150m, a premium of around 21%. Life Science, whose shares shot up 20% on the news, said it now believed a sale would provide a "superior outcome" for shareholders.
Market Movers
FTSE 100 (UKX) 10,154.43 -0.52%
FTSE 250 (MCX) 23,390.63 -0.06%
techMARK (TASX) 5,917.46 -0.47%
FTSE 100 - Risers
Metlen Energy & Metals (MTLN) 46.35p 4.27%
Scottish Mortgage Inv Trust (SMT) 1,235.50p 2.11%
British Land Company (BLND) 417.80p 1.90%
Persimmon (PSN) 1,449.50p 1.86%
Centrica (CNA) 190.95p 1.81%
DCC (CDI) (DCC) 4,662.00p 1.79%
Coca-Cola Europacific Partners (DI) (CCEP) 6,630.00p 1.69%
Bunzl (BNZL) 2,052.00p 1.68%
Legal & General Group (LGEN) 264.80p 1.57%
Kingfisher (KGF) 336.80p 1.57%
FTSE 100 - Fallers
Burberry Group (BRBY) 1,115.00p -4.70%
Smiths Group (SMIN) 2,530.00p -3.29%
AstraZeneca (AZN) 13,508.00p -2.68%
Rolls-Royce Holdings (RR.) 1,208.00p -2.58%
Airtel Africa (AAF) 351.60p -2.50%
Rentokil Initial (RTO) 465.70p -2.43%
GSK (GSK) 1,817.50p -2.42%
Experian (EXPN) 2,719.00p -2.37%
JD Sports Fashion (JD.) 82.56p -2.34%
Halma (HLMA) 3,570.00p -2.30%
FTSE 250 - Risers
Pan African Resources (PAF) 147.20p 6.36%
Pets at Home Group (PETS) 211.20p 5.39%
Harbour Energy (HBR) 225.60p 4.93%
Endeavour Mining (EDV) 4,530.00p 4.28%
Discoverie Group (DSCV) 646.00p 4.03%
B&M European Value Retail S.A. (DI) (BME) 176.10p 3.47%
Shaftesbury Capital (SHC) 145.10p 3.05%
Pagegroup (PAGE) 204.20p 2.92%
Great Portland Estates (GPE) 367.00p 2.80%
Bluefield Solar Income Fund Limited (BSIF) 70.50p 2.62%
FTSE 250 - Fallers
Oxford Nanopore Technologies (ONT) 163.10p -4.73%
HGCapital Trust (HGT) 485.00p -4.34%
W.A.G Payment Solutions (EWG) 125.00p -3.85%
Energean (ENOG) 843.00p -3.82%
Avon Technologies (AVON) 1,814.00p -3.30%
Ceres Power Holdings (CWR) 310.00p -3.13%
RTW Biotech Opportunities Ltd (RTW) 2.15p -2.71%
OSB Group (OSB) 605.00p -2.42%
THG (THG) 39.96p -2.30%
4Imprint Group (FOUR) 4,120.00p -2.25%