* US dollar index at 3-year low, no change seen from Fed
* World stocks edge higher, Europe up for fifth session
* Silver rebounds after sharp losses
(Adds New York dateline, U.S. trading)
By Mike Peacock and Al Yoon
LONDON/NEW YORK, April 27 (Reuters) - The U.S. dollar fell
to a three year low against major currencies on Wednesday
before a Federal Reserve decision which is expected to reaffirm
its easy monetary policy, while world stocks crept higher.
The dollar <.DXY> skidded to 73.493 on the Intercontinental
Exchange's dollar index <.DXY>, driven by widening interest
rate differentials between the U.S. and Europe in particular.
The dollar index is now close to 10 percent below its peak
in January and many traders expect it eventually to revisit an
all-time low of 70.698 hit in 2008.
The Fed is set to confirm it will complete its $600 billion
bond-buying program and renew its commitment to rock-bottom
borrowing costs for "an extended period" in its statement on
Wednesday [].
In addition, Fed Chairman Ben Bernanke will hold the
first-ever regularly scheduled news conference by a U.S.
central bank chief at around 2.15pm (1815 GMT).
"It's clear Fed monetary policy is the reason for dollar
weakness. If we don't get any hint that the Fed will normalise,
the dollar will continue to stay under selling pressure," said
Lutz Karpowitz, currency strategist at Commerzbank in
Frankfurt.
While the Fed continues to print money, the European
Central Bank raised rates for the first time in two years this
month and is poised for a repeat dose before too long.
The euro jumped to a high of $1.4715 <EUR=> after breaking
above $1.47 for the first time since December 2009. It was last
up 0.19 percent at $1.467.
Within the euro zone, there was no let up for the bonds of
the bloc's high debtors as speculation that Greece will have to
restructure ran unchecked.
Greek government bond yields surged to fresh record peaks,
with 10-year borrowing costs nearing 16 percent. Portuguese
10-year yields edged up to a new high of 10.18 percent
<PT10YT=TWEB> as the country's caretaker government negotiates
terms of a bailout.
Benchmark U.S. 10-year Treasury yields rose 0.04 percentage
point to 3.35 percent. The U.S. government reported orders for
durable goods increased 2.5 percent in March, greater than the
2.0 percent rise expected in a Reuters poll of economists.
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Fed funds rate expectations: http://r.reuters.com/xyz48r
Fed QE timelines: http://r.reuters.com/faq98r
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WORLD STOCKS FIRM
The Dow Jones industrial average <> rose 11.05 points,
or 0.09 percent, to 12,606.42. The Standard & Poor's 500 Index
<.SPX> increased 0.39 points, or 0.03 percent, to 1,347.63 and
the Nasdaq Composite Index <> edged up 3.87 points, or
0.14 percent, to 2,851.41.
Whirlpool Corp <WHR.N> extended the parade of
stronger-than-expected U.S. corporate earnings. The world's
largest appliance maker trumped quarterly profit and sales
estimates on cost controls and improving sales in most markets.
The shares rose 3.2 percent to $90.70. []
World stocks as measured by the MSCI All-Country World
Index <.MIWD00000PUS> gained 0.3 percent to 353.06.
The FTSEurofirst 300 index of top European shares rose 0.5
percent at 1,152.15, gaining ground for the fifth session as
investors focused on strong results from bellwethers such as
Ericsson <ERICb.ST> and Renault <RENA.PA>.
Japan's Nikkei <> closed up 1.4 percent but it could
face downward pressure after ratings agency Standard & Poor's
revised its outlook on Japan's sovereign debt to negative, a
move which caused the yen to slip.
Aside from the ECB, Asian and Latin American central banks
have also been tightening monetary policy for some time.
The split in monetary policy has helped revive the "carry
trade," in which investors borrow in a low-yielding currency to
invest in higher-yielding assets or currencies.
Investors have been snapping up the high-yielding
Australian dollar <AUD=D4> -- against which the greenback hit a
29-year low on Wednesday following a big jump in Australian
inflation -- while China let the yuan <CNY=SAEC> rise to a
post-2005 revaluation high, triggering gains in emerging Asian
currencies.
On the other hand, prospects of a near-term Bank of England
rate rise receded further after a reading of first quarter UK
growth only just reversed the previous quarter's fall.
Sterling <GBP=> rose, nevertheless. Traders said the market
had positioned for a weaker reading which drove investors to
quickly cut short positions after the fact.
SILVER LINING
Silver, the superstar commodity of the year, steadied from
a three percent fall on Tuesday, its biggest one-day loss in
six weeks, which followed Monday's rally to near record
levels.
Spot silver <XAG=> firmed slightly to $45.78 an ounce and
is on track for a 21 percent gain this month and a 47-percent
rise this year, making it the top performing precious metal.
Gold <XAU=> rose $4.45, or 0.30 percent, to $1511.40 an
ounce.U.S. light sweet crude oil <CLc1> rose 13 cents, or 0.12
percent, to $112.34 per barrel.
* For Reuters Global Investing Blog, click on
http://blogs.reuters.com/globalinvesting
* For the MacroScope Blog, click on
http://blogs.reuters.com/macroscope
* For Hedge Fund Blog, click on
http://blogs.reuters.com/hedgehub
(Additional reporting by Naomi Tajitsu in London, Blaise
Robinson in Paris and Ian Chua in Sydney)
