Britain's FTSE gains as miners rally

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* Blue chip FTSE 100 up 0.2 pct

* Dollar falls after U.S. Fed minutes, miners gain

* Kingfisher, Kaz Minerals up after results

By Kit Rees

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

The blue chip FTSE 100 index rose 0.2 percent to6874.03 points by 0858 GMT, in line with the broader risk-onmood across European markets.

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

This helped support commodity-related stocks, asdollar-denominated commodities became cheaper for holders offoreign currencies.

Antofagasta, Anglo American, BHP Billiton and Glencore all rose between 2.2 percent and3.5 percent.

"We've had some comments in the minutes from the FederalReserve last night which ... were slightly more dovish thanexpected, so it's actually caused a bit of relief there becausethere were some fears that they were going to hike rates beforethe market's ready," said Jonathan Roy, advisory investmentmanager at Charles Hanover Investments.

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

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

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

Companies trading with entitlement to their latest dividendpayment fell, however, with the likes of Pearson,British American Tobacco and Legal & General all trading in negative territory.

Among the mid-caps, a well-received set of second-quarterresults also boosted the shares of Kaz Minerals, whichjumped 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 beingpleasingly somewhat ahead of our expectations," Yuen Low,analyst at Shore Capital Markets, said in a note.

(Reporting by Kit Rees; editing by Mark Heinrich)