FTSE 100 slips as dollar falls on Fed stance, trade jitters linger

London's exporter-heavy FTSE 100 fell on Tuesday as the dollar dropped on hopes that the U.S. Federal Reserve would affirm indications of a more relaxed policy, with investors anticipating Sino-U.S. trade talks later this week.

The FTSE 100, whose components earn a large chunk of their revenue from outside the UK, shed 0.6% and the mid-cap FTSE 250 lost 0.4% by 0703 GMT.

Internationally exposed stocks fell as traders sold-off the dollar and bet on more dovish signals from Fed Chairman Jerome Powell, while uncertainty over how trade talks would pan out at the G20 summit hit shares of HSBC and other Asia-focussed banks.

Small-cap Carpetright, Britain's biggest floor coverings retailer, surged 23% as it returned to underlying sales growth in its new financial year and said its turnaround was on track.