* Expectations of Fed stimulus boost riskier assets
* World shares up 0.25, Wall St seen higher
* Dollar under pressure against higher yield currencies
* U.S. central bank decision due at 1730 GMT
* Oil firmer as OPEC meets, no change in output seen
LONDON, Dec 12 (Reuters) - World equities and commodities edged higher on Wednesday, supported by widespread expectations of further monetary stimulus from the U.S. Federal Reserve when it ends a two-day policy meeting later in the day.
U.S. stock index futures suggested Wall Street was also likely to see a sixth day of gains as investors anticipated the Fed's decision, due at 1730 GMT.
In contrast, safe-haven assets like the dollar, U.S. Treasury bonds and German bunds eased, with the greenback hitting multi-month lows against some higher yielding currencies.
Markets expect the Fed to expand its current asset purchase scheme, committing to buy $45 billion of U.S. debt a month and extend purchases of mortgage-backed debt, to help sustain the fragile U.S. economic recovery.
"We think that more quantitative easing is coming and this next round will be the most aggressive yet," said Ralf Preusser, head of European rates research at BofA Merrill Lynch Global Research.
Given a general improvement in economic data from the United States and China and signs of stabilisation in Europe, the Fed's decision should underpin demand for riskier assets, although there is a chance chairman Ben Bernanke may use the subsequent news conference, at 1915 GMT, to signal a change in its outlook.
"I wouldn't expect too much volatility going into the meeting but afterwards though it will depend on whether they give any guidance on thresholds for unemployment and inflation in the future," said Michael Leister, senior interest rates strategist for Commerzbank.
In any event the meeting's outcome is likely to be quickly overshadowed by developments at talks in Washington designed to avert the "fiscal cliff" - spending cuts and tax increases that will be triggered automatically if no federal budget is agreed.
The squeeze, equivalent to some $600 billion, would take effect in January and is of great concern to the markets because it could tip the giant U.S. economy back into recession and stall the fragile global recovery.
President Barack Obama and U.S. House of Representatives Speaker John Boehner spoke by phone on Tuesday after exchanging new proposals on the budget, a discussion some investors saw as a sign of progress that added to the firmer tone in the markets.
MSCI's world equity index was up 0.25 percent at 337.82 points, helped by a gain of 0.5 percent in MSCI's broadest index of Asia-Pacific shares outside Japan , which is at 16-month highs.
In Europe, the FTSEurofirst 300 index of top companies extended a steep three-week rally to be up about 0.2 percent at 1.140.80 points, a level not seen for 18 months.
London's FTSE 100, Frankfurt's DAX and the French CAC-40 were flat to 0.4 percent higher.
The strength in equities market encouraged selling of safe-haven assets, pushing the main German Bund futures contract down 14 basis points to 145.27.
AGGRESSIVE MOVE RISK
The euro gained 0.2 percent against a weaker dollar ahead of the Fed's decision, reaching $1.3026, well above a low of $1.2876 reached last week.
The greenback suffered more heavily against other high-yielding currencies as some investors saw a risk the Fed may ease more aggressively than expected.
"People are selling the dollar on the possibility that the Fed could do more easing than the market is expecting," said Niels Christensen, currency strategist at Nordea in Copenhagen, referring to the extent of monthly Fed bond purchases.
"If it is a neutral decision, they could buy it back on the fact. But if they do more, say above $50 billion (a month), then the dollar would be on the defensive."
The higher-yielding Australian dollar rose to a three-month peak of $1.0552, while the greenback fell to an eight-week low against the Canadian dollar of C$0.9853 CAD=D4 . The New Zealand dollar hit a nine-month high of $0.8418 .
In the commodities sector, prices were well supported by the hopes of more monetary easing. London copper was up 0.4 percent at $8,132.75 a tonne and near a two-month high, while spot gold inched up 0.25 percent to $1,713.94 an ounce.
Brent crude traded at near $109 a barrel on the Fed easing expectations, although analyst said the gains were being limited by expectations that OPEC oil ministers meeting in Vienna on Wednesday will keep the group's current output steady, despite forecasts for a fall in demand in the first half of 2013.
Brent futures were up 0.9 percent at $108.98 a barrel while U.S. crude was 0.7 percent higher at $86.42 a barrel.