London stocks eye modest gains as gold surges and dollar slides

London stocks are set to open modestly higher on Wednesday, with a weaker US dollar and fresh record highs in gold dominating the macro backdrop ahead of the Federal Reserve’s rate decision and a heavy slate of Big Tech earnings.

Futures point to the FTSE 100 opening 12.6 points higher, or 0.1%, at 10,220.40. The index closed up 0.6% at 10,207.80 on Tuesday.

In currency markets, sterling strengthened to USD1.3806 early Wednesday from USD1.3765 at the London close, while the euro climbed to USD1.1996 from USD1.1969. The dollar weakened further against the yen, slipping to JPY152.68 from JPY153.05.

The greenback’s decline has been driven by policy uncertainty out of Washington, renewed trade tensions and speculation that the Trump administration may be tolerant of a weaker dollar. That view was reinforced by last week’s USD/JPY rate checks by the New York Fed and comments from US President Donald Trump, who played down the currency’s recent slide.

Gold surged to another record high as the dollar sell-off gathered pace. Bullion was quoted at USD5,261.40 an ounce early Wednesday, up from USD5,093.94 on Tuesday, after Trump said he was unconcerned by the dollar’s weakness, insisting it was “doing great”.

On Wall Street, markets closed mixed on Tuesday. The Dow Jones Industrial Average fell 0.8%, while the S&P 500 rose 0.4% and the Nasdaq Composite gained 0.9%. Attention now turns to earnings from four of the so-called Magnificent Seven, with Microsoft, Meta Platforms and Tesla reporting on Wednesday, followed by Apple on Thursday.

Asian markets were mixed overnight. Japan’s Nikkei 225 edged down 0.1%, China’s Shanghai Composite rose 0.6%, and Hong Kong’s Hang Seng surged 2.5%. Australia’s S&P/ASX 200 slipped 0.1%.

In Europe, German economy minister Katherina Reiche is expected to lower the government’s 2026 growth forecast later on Wednesday as she presents the annual economic report. Analysts warn weak exports could see growth trimmed from the 1.3% projected last autumn. Germany recorded modest growth of 0.2% last year after two consecutive years of recession.

In commodities, gold continued to dominate headlines as investors positioned ahead of the Fed decision.