Global shares firm, dollar steady before Fed decision
By Richard Hubbard
LONDON (Reuters) - World shares edged higher while major currencies and commodities stayed within recent ranges on Wednesday as investors nervously awaited a decision on the U.S. Federal Reserve's next move.
The Fed's rate setters are expected to leave policy ultra-loose following the central bank's monthly meeting but may hint they will start scaling back its bond buying later this year if the U.S. labor market continues to improve.
Fed Chairman Ben Bernanke's comment last month that the U.S. central bank could begin to curtail bond purchases at one of its "next few meetings" rocked financial markets.
"The market is very nervous," said Oliver Roth, head trader at Close Brothers Seydler.
"For investors, I would say that they should be careful and set their limits - especially stop limits - very carefully, because if there is some change coming up for the Fed policy then there could be a dramatic drop for the market."
The policy-setting Federal Open Market Committee will announce its decision at 2 p.m. ET, followed 30 minutes later by a news conference with Bernanke.
Speculation about when and by how much the Fed could taper its $85 billion a month of bond purchases has supported the dollar against emerging and growth-linked currencies, although uncertainty over the impact of any policy shift has led some investors to prefer the yen or the euro.
The dollar shed 0.2 percent against the Japanese currency on Wednesday to trade around 95.10 yen, but was steady against the euro near $1.34 after the single currency touched a four-month high on Tuesday. Continued...