World stocks inched to a three-week high and the dollar drifted lower on Thursday as markets waited to see if the Federal Reserve would raise U.S. interest rates for the first time in almost a decade, or opt to wait a little longer.

Before the announcement at 2:00 a.m. EDT, markets were still leaning towards the latter although the high uncertainty had kept Europe main markets .FTEU3 at virtual standstill for most of the session after two days of gains.

Rises overnight in Asia meant MSCI's all-world share index .MIWD00000PUS had managed a three-week high, but it was small scale stuff and currency and bond markets moves were low key too.

The dollar .DXY was under some mild pressure, mostly from the euro EUR= after weak U.S. inflation data had underscored one of the arguments for the Fed to hold fire.

Wall Street ESc1 meanwhile was also set for a subdued start after it had finished at a near month high on Wednesday while oil LCOc1 and other commodities gave back some of the sharp gains they had made.

"I think path (timeline for future moves) is more important than the rate decision today," said Didier Duret, Chief Investment Officer at ABN Amro.

"They want to stabilize the market's confidence, so I think they will wait till October ... but they will maintain a very prudent and cautious approach, after all they are still the masters of the universe."

The Fed's decision is attracting so much attention in world markets because a hike would be its first since 2006 as well as finally lifting rates from the near zero they have been at since the depths of the global financial crisis in late 2008.

It has been expected to pull the trigger for most of this year, but those expectations have faded following a bout of global market turmoil over the past couple of months, especially in China.

A further drop in jobless claims ahead of the U.S. open bolstered signs of improvement in the employment market. But futures price continued to suggest an only one in four chance <0#FF:> of a hike later in the day.