LONDON: Stock markets rose and the dollar dipped Wednesday, with all eyes on the size of the Federal Reserve's latest US interest-rate hike to cool inflation.
Analysts expect the Fed to raise its rate by 25 basis points, which would be less aggressive than December's half-point increase, as inflation in major economies starts to ease from the highest levels in decades.
The European Central Bank and Bank of England announce their latest interest-rate decisions on Thursday.
Ahead of the European announcements, data Wednesday showed the eurozone's annual inflation rate slowing further.
"A lot is riding on the Fed dialling back the pace of rate hikes to 25 basis points and there will also be plenty of attention on the surrounding messaging from chair Jerome Powell and his colleagues," said AJ Bell investment director Russ Mould.
"Helping the market's mood... was data that revealed slowing US wage growth, another signal that inflationary pressures have peaked."
Asia's main stock markets closed higher Wednesday, rebounding from two days of losses, while European indices edged higher approaching the halfway stage on Wednesday.
The gains will provide some relief to investors after January's rally appeared to have hit the buffers this week on lingering concerns about the economic outlook.
"Wall Street is slowly growing confident that this week's Fed rate hike might end up being the last one in this tightening cycle," said Edward Moya, an analyst at OANDA trading group.
All three main indexes on Wall Street ended more than one per cent higher Tuesday, helped by strong earnings from big-ticket firms including ExxonMobil and General Motors.
In India on Wednesday, Mumbai managed to rally around 1.9 per cent, despite more heavy selling of tycoon Gautam Adani's business empire.
The group has shed about one-third of its value, or $76 billion, following allegations of massive accounting fraud from a US investment group.
Worst-hit was Adani Total Gas, which saw trading suspended again after another 10 per cent drop, while flagship Adani Enterprises shed more than five per cent.