European Markets Firmer, Focus on Economy, Fed

(REUTERS) -- European shares and the single currency held firm on Wednesday as investor focus switched to the broader economic outlook and some strong results from leading U.S. companies, and away from worries about the stalemate in Greek debt talks.

Fresh details on the economic picture are due from Germany, which will release a key business sentiment indicator for January, while the Britain unveils its preliminary estimate of fourth quarter gross domestic product.

Later, the U.S. Federal Reserve ends its first two-day policy meeting of 2012 where it is due to release a new long-term interest-rate projection that could signal an extended period of ultra-low interest rates.

The risk is the Fed could be more dovish than what the market is expecting, in which case you might see the dollar pull back, Geoff Kendrick, currency strategist at Nomura said.

The recent resilience in global stocks and the euro, despite inconclusive talks over Greece's bailout, combined with the outlook for a prolonged period of low U.S. interest rates, may strengthen downward pressure on the dollar.

Europe remains a concern every day, but for today the focus is on the FOMC, Junya Tanase, chief currency strategist at JPMorgan Chase in Tokyo said.

The euro was steady at around $1.3030, off a three-week high of $1.3063 hit on Tuesday. The dollar index <.DXY>, which measures the currency against six other key currencies, hovered near a three-week low just below 80.

The euro extended gains versus a broadly weaker yen to hit a one-month high after Japan reported its first trade deficit in over 30 years, which prompted investors to pare back on long positions in the Japanese currency.

Greek debt restructuring talks, which have dominated market sentiment all week, are at an impasse as private creditors consider their next step. Euro zone finance ministers have rejected the bondholders' offer to write down the nominal value of their debt by 50 percent in return for new longer-term bonds paying an interest rate of 4 percent.

The pan-European FTSEurofirst 300 <.FTEU3> index of top shares was barely changed in early trading at around 1,045.02 points as weakness in European technology stocks offset gains in financial shares.

Shares in mobile telecoms network gear maker Ericsson sank after it reported fourth quarter earnings well below forecast and provided a gloomy outlook on 2012.

A big rally in Japanese financial stocks and in Australia helped lift the MSCI world equity index by around 0.3 percent to 315.80.

(Additional reporting by Anirban Nag; Editing by Catherine Evans)