Britain's FTSE gains as miners rally

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* Blue chip FTSE 100 up 0.2 pct

* Dollar falls after U.S (Other OTC: UBGXF - news) . Fed minutes, miners gain

* Kingfisher (Frankfurt: 812861 - news) , Kaz Minerals (LSE: KAZ.L - news) up after results

By Kit Rees

LONDON, Aug 18 (Reuters) - UK shares rose on Thursday, breaking a two-day losing streak after commodity-related stocks gained on the back of a weaker dollar.

The blue chip FTSE 100 index rose 0.2 percent to 6874.03 points by 0858 GMT, in line with the broader risk-on mood across European markets.

The dollar softened after the minutes of the U.S. Federal Reserve's July policy meeting showed that policymakers were divided over whether to raise interest rates soon.

This helped support commodity-related stocks, as dollar-denominated commodities became cheaper for holders of foreign currencies.

Antofagasta (Other OTC: ANFGF - news) , Anglo American (LSE: AAL.L - news) , BHP Billiton (NYSE: BBL - news) and Glencore (Frankfurt: 8GC.F - news) all rose between 2.2 percent and 3.5 percent.

"We've had some comments in the minutes from the Federal Reserve last night which ... were slightly more dovish than expected, so it's actually caused a bit of relief there because there were some fears that they were going to hike rates before the market's ready," said Jonathan Roy, advisory investment manager at Charles Hanover Investments.

The FTSE 100 index, however, was trading below a 14-month high hit earlier in the week, having been supported by the Bank of England's decision to cut interest rates to a record low and by post-Brexit weakness in sterling.

"We've seen a rally very much based on quantitative easing from the Bank of England and expectations of maybe further easing going forward. However, as this story starts to die out, people are looking for new reasons and new catalysts to actually push the market to fresh highs from here," Roy added.

Home improvement retailer Kingfisher advanced 1.8 percent after reporting an increase in sales over the three months, and said that it had seen no impact yet from Britain's June 23 vote to leave the European Union.

Companies trading with entitlement to their latest dividend payment fell, however, with the likes of Pearson (Xetra: 858266 - news) , British American Tobacco (Kuala Lumpur: 4162.KL - news) and Legal & General (LSE: LGEN.L - news) all trading in negative territory.

Among the mid-caps, a well-received set of second-quarter results also boosted the shares of Kaz Minerals, which jumped nearly 11 percent to touch a 4-month high.

"KAZ's cost-cutting efforts are bearing fruit, which, combined with a weaker tenge, resulted in profits being pleasingly somewhat ahead of our expectations," Yuen Low, analyst at Shore Capital Markets, said in a note.

(Reporting by Kit Rees; editing by Mark Heinrich)