NEW YORK: The US dollar slid to a three-year low against major currencies and world equity markets edged higher on Wednesday after the Federal Reserve signaled it would retain extensive support for the US economy.
Wall Street rebounded slightly and oil prices nudged up after the Fed said in a statement that it believed the economic recovery was proceeding at a moderate pace, with little risk an inflationary psychology would take hold.
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 awaited remarks by Fed Chairman Ben Bernanke who will speak starting at 2:15 p.m. (1815 GMT) at his first-ever news conference on monetary policy.
Gold rose by almost 1.0 percent and silver steadied after a sharp sell-off the previous session, with both benefiting from the Fed reiterating it would keep interest rates exceptionally low.
Spot gold prices rose $13.14 to $1,520.10 an ounce.
US Treasuries fell as profit-taking on recent gains and maneuvers to make room for five-year supply overshadowed the Fed's perfunctory policy statement.
The benchmark 10-year US Treasury note was down 12/32 in price to yield 3.35 percent.
"FOMC statement is very similar to what we saw last time. They were not going to throw any curve balls today," said John Brady, senior vice president of global interest rate products at MF Global in Chicago.
Bernanke's press conference also is unlikey to produce any surprises.
"They want to establish this press conference as a successful platform and one of the tools to communicate its message if the market conditions necessitate. He will play it right down the middle," he said.
Further gains on Wall Street were limited despite bullish comments from General Electric, whose shares rose 3.2 percent after its finance chief said profit growth over the next few years will be the fastest GE had seen in a decade.
Recent US stock gains have come on strong corporate results, with about 75 percent of reported S&P companies beating forecasts.
That trend continued on Wednesday, with Boeing Co, Whirlpool Corp and WellPoint Inc all topping analyst consensus expectations.
The Dow Jones industrial average was up 48.55 points, or 0.39 percent, at 12,643.92. The Standard & Poor's 500 Index was up 2.48 points, or 0.18 percent, at 1,349.72. The Nasdaq Composite Index was up 8.40 points, or 0.29 percent, at 2,855.94.
Strong corporate earnings in the technology and auto sector also helped European shares, with an expected confirmation of loose US monetary policy adding to the bullish outlook.
The pan-European FTSEurofirst 300 index of top shares closed 0.3 percent higher at 1,147.24 points.
In London, Brent crude gained $1.09 to $125.23 a barrel. US crude gained 43 cents to $112.64 a barrel.
"Since the Fed is ignoring inflationary pressures, it suggests further downside pressure on the dollar, which would translate into higher commodity prices," said Tom Knight, trader at Truman Arnold in Texarkana, Texas.
The Fed's super-loose interest rate policy remains a source of trouble for the dollar, which has lost 10 percent of its value against major currencies since a January peak.
The euro was up 0.49 percent at $1.4714, its highest since December 2009. It was at $1.4665 prior to the Fed statement.
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