* US dollar index at 3-year low, no change seen from Fed
* World stocks edge higher, Europe up for fifth session
* U.S. bond prices add to losses after FOMC statement
* Fed signals no rush to scale back US economic support
(Adds fresh prices after Fed statement)
By Al Yoon and Herbert Lash
NEW YORK, April 27 (Reuters) - The U.S. dollar was at a
three-year low against major currencies and world equity
markets edged slightly higher on Wednesday after the Federal
Reserve signaled it would maintain its extensive support for
the U.S. economy.
Wall Street rebounded slightly and oil prices nudged up
after the Fed indicated in a statement that it believed the
economic recovery was proceeding at a moderate pace, with
little risk an inflationary psychology would take hold. For
details see: []
The policy-setting Federal Open Market Committee said as
expected after a two-day meeting that it intends to complete
its $600 billion bond-buying program in June as scheduled.
"We did not expect any material surprises in the FOMC
statement and there was none. It remains quite dovish," said
Bret Barker, a portfolio manager at TCW in Los Angeles.
"It could be argued they slightly downgraded growth and
maintained the view that inflation is 'transitory.' It was very
boilerplate," Barker said.
Following the FOMC statement investors now await remarks by
Fed Chairman Ben Bernanke who speak starting at 2:15 p.m. (1815
GMT) at his first-ever news conference on monetary policy.
Bernanke will likely hammer home the case for a patient
approach to withdrawing the Fed's extensive support for the
U.S. economy
The dollar fell against the euro after bouncing around a
bit before the single European currency ultimately extended
gains to trade at 1.4700, up about 0.4 percent on the day.
The dollar slipped to 82.36 yen from 82.60 yen <JPY=>
before the announcement, but remained up 1.1 percent on the
day. [] and []. After the Fed
statement the dollar index <.DXY> remained near the three year
low seen earlier on Wednesday.
The Dow Jones industrial average <> was up 32.54
points, or 0.26 percent, at 12,627.91. The Standard & Poor's
500 Index <.SPX> was up 0.63 points, or 0.05 percent, at
1,347.87. The Nasdaq Composite Index <> was up 2.91
points, or 0.10 percent, at 2,850.45.
Crude oil prices rose, lifted by a sharp drawdown in U.S.
fuel inventories, after U.S. Energy Information Administration
data showed domestic gasoline stockpiles fell 2.51 million
barrels last week to the lowest level since August 2009.
[]
It was the 10th drawdown in a row, much deeper than the 1.1
million barrel draw forecast in a Reuters poll. []
"Crude futures headed back higher, after the initial
knee-jerk selling on the EIA stock build, as traders reacted to
the drawdowns in product stocks, chiefly gasoline," said Gene
McGillian, analyst at Tradition Energy in Stamford
Connecticut.
"Higher gasoline prices dragged crude up and now people are
waiting for Fed Chief Ben Bernanke's word on monetary policy."
U.S. light sweet crude oil <CLc1> rose 17 cents to $112.38
a barrel.
U.S. Treasury prices briefly extended their decline after
the FOMC statement. Benchmark 10-year notes <US10YT=RR> last
traded down 11/32 in price to yield 3.35 percent after falling
as much as 15/32 earlier in the session.
The difference between interest rates set by the Fed and
other major central banks, which have been raising rates, is
underpinning the dollar's weakness.
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 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.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Fed funds rate expectations: http://r.reuters.com/xyz48r
Fed QE timelines: http://r.reuters.com/faq98r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
World stocks as measured by the MSCI all-country world
index <.MIWD00000PUS> rebounded about 0.2 percent at 352.61.
The FTSEurofirst 300 index <> of top European shares
rose 0.3 percent at 1,149.24, gaining ground for the fifth
session as investors focused on strong results from bellwethers
such as Ericsson <ERICb.ST> and Renault <RENA.PA>.
(Additional reporting by Naomi Tajitsu in London, Blaise
Robinson in Paris and Ian Chua in Sydney; Writing by Herbert
Lash)
