World stocks near record highs as Fed rate decision looms

The dollar found its footing on Wednesday, having sold off sharply after US President Donald Trump seemed to shrug off its recent weakness, while upbeat earnings kept world stocks near record highs before a Federal Reserve rate decision.

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The US currency nudged off four-year lows but sentiment remained fragile following the sharpest selloff since Trump's tariff blitz rocked markets last April.

European share markets fell, while US stock futures pointed to a positive open for Wall Street and Japan's blue-chip Nikkei nudged up. The MSCI World Stock Index hovered at record highs.

“Last week when there seemed to be a flight from the US in general, you had equities falling, Treasuries taking hits, and the dollar falling. Now it's more of a dollar story,” said Jan von Gerich, Nordea chief markets analyst.

The Fed is expected to hold rates steady at a meeting overshadowed by a Trump administration criminal investigation of US central bank chief Jerome Powell, an evolving effort to fire Fed Governor Lisa Cook, and the coming nomination of a successor to Powell in May.

“The most interesting thing about the Fed tonight is that Powell could now say something more on this political pressure, because he’s refrained from all of that so far,” von Gerich said.

The dollar index, which measures the US currency against six major rivals, was 0.378 higher at 96.27 after dropping more than 18 on Tuesday to hit a four-year low. Trump said on Tuesday the value of the dollar was “great”, when asked whether he thought it had declined too much.