GLOBAL MARKETS-US dollar at 3-year low, stocks up before Fed

* US dollar index at 3-year low, no change seen from Fed

* World stocks edge higher, Europe up for fifth session

* Silver rebounds after sharp losses

(Adds New York dateline, U.S. trading)

By Mike Peacock and Al Yoon

LONDON/NEW YORK, April 27 (Reuters) - The U.S. dollar fell to a three year low against major currencies on Wednesday before a Federal Reserve decision which is expected to reaffirm its easy monetary policy, while world stocks crept higher.

The dollar <.DXY> skidded to 73.493 on the Intercontinental Exchange's dollar index <.DXY>, driven by widening interest rate differentials between the U.S. and Europe in particular.

The dollar index is now close to 10 percent below its peak in January and many traders expect it eventually to revisit an all-time low of 70.698 hit in 2008.

The Fed is set to confirm it will complete its $600 billion bond-buying program and renew its commitment to rock-bottom borrowing costs for "an extended period" in its statement on Wednesday [ID:nN26273939].

In addition, Fed Chairman Ben Bernanke will hold the first-ever regularly scheduled news conference by a U.S. central bank chief at around 2.15pm (1815 GMT).

"It's clear Fed monetary policy is the reason for dollar weakness. If we don't get any hint that the Fed will normalise, the dollar will continue to stay under selling pressure," said Lutz Karpowitz, currency strategist at Commerzbank in Frankfurt.

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 euro jumped to a high of $1.4715 after breaking above $1.47 for the first time since December 2009. It was last up 0.19 percent at $1.467.

Within the euro zone, there was no let up for the bonds of the bloc's high debtors as speculation that Greece will have to restructure ran unchecked.

Greek government bond yields surged to fresh record peaks, with 10-year borrowing costs nearing 16 percent. Portuguese 10-year yields edged up to a new high of 10.18 percent as the country's caretaker government negotiates terms of a bailout.

Benchmark U.S. 10-year Treasury yields rose 0.04 percentage point to 3.35 percent. 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 FIRM

The Dow Jones industrial average <.DJI> rose 11.05 points, or 0.09 percent, to 12,606.42. The Standard & Poor's 500 Index <.SPX> increased 0.39 points, or 0.03 percent, to 1,347.63 and the Nasdaq Composite Index <.IXIC> edged up 3.87 points, or 0.14 percent, to 2,851.41.

Whirlpool Corp extended the parade of stronger-than-expected U.S. corporate earnings. The world's largest appliance maker trumped quarterly profit and sales estimates on cost controls and improving sales in most markets. The shares rose 3.2 percent to $90.70. [nN27109840]

World stocks as measured by the MSCI All-Country World Index <.MIWD00000PUS> gained 0.3 percent to 353.06.

The FTSEurofirst 300 index of top European shares rose 0.5 percent at 1,152.15, gaining ground for the fifth session as investors focused on strong results from bellwethers such as Ericsson and Renault .

Japan's Nikkei <.N225> closed up 1.4 percent but it could face downward pressure after ratings agency Standard & Poor's revised its outlook on Japan's sovereign debt to negative, a move which caused the yen to slip.

Aside from the ECB, Asian and Latin American central banks have also been tightening monetary policy for some time.

The split in monetary policy has helped revive the "carry trade," in which investors borrow in a low-yielding currency to invest in higher-yielding assets or currencies.

Investors have been snapping up the high-yielding Australian dollar -- against which the greenback hit a 29-year low on Wednesday following a big jump in Australian inflation -- while China let the yuan rise to a post-2005 revaluation high, triggering gains in emerging Asian currencies.

On the other hand, prospects of a near-term Bank of England rate rise receded further after a reading of first quarter UK growth only just reversed the previous quarter's fall.

Sterling rose, nevertheless. Traders said the market had positioned for a weaker reading which drove investors to quickly cut short positions after the fact.

SILVER LINING

Silver, the superstar commodity of the year, steadied from a three percent fall on Tuesday, its biggest one-day loss in six weeks, which followed Monday's rally to near record levels.

Spot silver firmed slightly to $45.78 an ounce and is on track for a 21 percent gain this month and a 47-percent rise this year, making it the top performing precious metal.

Gold rose $4.45, or 0.30 percent, to $1511.40 an ounce.U.S. light sweet crude oil rose 13 cents, or 0.12 percent, to $112.34 per barrel.

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(Additional reporting by Naomi Tajitsu in London, Blaise Robinson in Paris and Ian Chua in Sydney)