* Fed seen set to announce fresh round of bond buying * U.S. dollar slides to multi-month lows vs higher-yielders By Wanfeng Zhou NEW YORK, Dec 12 (Reuters) - Global shares edged higher and commodities firmed on Wednesday on expectations the U.S. Federal Reserve will announce a fresh round of bond buying to stimulate a fragile economic recovery. The U.S. dollar fell against the euro and hit multi-month lows against higher-yielding currencies such as the Australian and New Zealand dollars as the prospect of more Fed monetary stimulus eroded the appeal of dollar-denominated assets. The Fed looks certain both to extend its purchases of mortgage-backed debt and replace another expiring stimulus program with a new round of money creation. Worries about the economy have mounted because of political wrangling in Washington over the government budget. The central bank will announce its decision around 12:30 p.m. (1730 GMT) at the end of its two-day policy meeting, and Fed Chairman Ben Bernanke will discuss it at a news conference at 2:15 p.m. (1915 GMT). "I think the market has already discounted that the Fed is going to announce more stimulus, so what's more important is what Chairman Bernanke says, which may give us clues on economic activity going forward," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. "We might see a bit of selloff after Bernanke's comments, but we've been up for five straight days, so that shouldn't be surprising." The MSCI global stock index advanced 0.3 percent to 338.05 points. Earlier in the session it touched a high of 338.23 points, its strongest level in nearly two months. The Dow Jones industrial average gained 22.31 points, or 0.17 percent, to 13,270.75. The Standard & Poor's 500 Index gained 3.60 points, or 0.25 percent, to 1,431.44. The Nasdaq Composite Index gained 1.78 points, or 0.06 percent, to 3,024.08. The S&P was up for a sixth straight session, its longest winning streak since August. With just two weeks of trading left this year, the S&P 500 is up about 14 percent so far. The FTSEurofirst 300 index closed up 0.1 percent to 1,139.67 points. Oil prices rose on the prospects of further U.S. stimulus. Brent crude futures were up $1.73 to $109.75 a barrel. U.S. crude was up $1.03 at $86.82 a barrel. Copper prices rose slightly and were near two-month highs. Gold was steady around $1,711 an ounce. Further monetary stimulus measures would likely support gold by stoking inflation fears and maintaining pressure on long-term interest rates, the opportunity cost of holding non-yielding bullion. After the Fed meeting, investors' attention will likely quickly refocus on the talks in Washington to avert the "fiscal cliff" of automatic spending cuts and tax increases that many fear would tip the U.S. economy back into recession next year. Negotiations intensified as President Barack Obama and U.S. House of Representatives Speaker John Boehner spoke by phone on Tuesday after exchanging new proposals. The euro rose 0.3 percent to $1.3039. The Australian dollar rose to a three-month high against the U.S. dollar. The New Zealand dollar touched its highest since Feb. 29, while the U.S. dollar slipped to an eight-week low against its Canadian counterpart. Many economists forecast the Fed will opt for monthly purchases of $45 billion in Treasury securities. The risk, analysts said, is that policymakers may decide to buy more than that, which would put the dollar under further selling pressure. "All eyes are on the Fed and that has clearly been the driver for this week, at least with the dollar down across the board," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington D.C. "We're seeing high yielders like the Aussie and kiwi benefit on expectations of further central bank easing." But the dollar reached an eight-month high against the yen on bets the Bank of Japan will implement more aggressive monetary easing after an election on Sunday that is expected to yield a victory for the Liberal Democratic Party. Treasury prices fell slightly as investors sold to make room for new debt issuance, and analysts said the expected Fed action has largely been priced into the market. The benchmark 10-year U.S. Treasury note was little changed, with the yield at 1.6541 percent.