(Reuters) - Stocks and the dollar retrenched on Wednesday amid speculation the Federal Reserve will take a dovish turn in its post-meeting statement later as signs emerge that the greenback's strength is hurting company profits. Worries that Greece's new government is heading for clashes with the rest of the euro zone over its debts saw European shares .FTEU3 stumble for a second day as Greek bonds also took another dive. [GVD/EUR] Gadget giant Apple .AAPL.O had grabbed headlines overnight after it reported the biggest quarterly profits in corporate history, but focus was now squarely on what message the Fed sends when it wraps up its first meeting of the year later. Wall Street ESc1 was expected to see a steady start. The dollar slipped against the euro EUR=, the yen JPY= and a number of other key currencies .DXY in early European trading before stabilising. Scepticism is growing that the Fed will raise rates by mid-year, as had been expected. Other major central banks are easing aggressively and the strong dollar and slumping oil prices are driving down inflation. Big U.S. firms that sell abroad are also grumbling, with a slew multinationals from Microsoft (MSFT.O) to Procter & Gamble (PG.N) having warned their situation will get worse if the greenback holds its strength. "The question at the top of every market participant's mind is whether the world's largest central bank will follow its global counterparts into a more dovish policy lean," said John Kicklighter, chief currency strategist at DailyFX. Two-year U.S. Treasury yields -- the most sensitive to U.S. rate hike expectations -- held above 0.50 percent US2YT=RR in Europe, having dipped on Tuesday following some weaker-than-expected durable goods data and lacklustre corporate earnings. European government bonds, with the exception of safe-haven Germany, saw their yields rise again as uncertainty about Greece persists. [GVD/EUR] Greek Prime Minister Alexis Tsipras named a cabinet of anti-austerity veterans on Tuesday and promptly halted the privatisation of Greece's biggest port, signalling he intentions to stick to his party's election pledges. Shares in Greece's main banks (BOPr.AT)(NBGr.AT) plunged over 20 percent. Greek five-year bond yields < GR5YT=TWEB> hit their highest since the country's 2012 debt restructuring and 10-year yields GR10YT=TWEB shot back above 10 percent. [GVD/EUR] SINGAPORE SLING It had all seemed brighter in Asia. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS ticked up 0.2 percent to a four-month high and Japan's Nikkei .N225 also reached a one-month high. As well as the sentiment boost of Apple's world record profits, Singapore's central bank eased monetary policy unexpectedly, its first unscheduled change in over a decade, jumping in ahead of a planned meeting in April. Singapore's central bank joins a growing list of counterparts -- from Denmark and Canada to Turkey and India -- that have made surprise moves in what is looking increasingly like a global currency war. The Singapore dollar skidded to its weakest in nearly 4-1/2 years. Other emerging Asian currencies also weakened, including Malaysia's ringgit MYR=MY and Thailand's baht THB=, despite their central banks keeping their rates on hold. Rising bets that the U.S. Fed will push back a rate hike saw emerging market shares consolidate their recent gains. Fed funds rates <0#FF:> are now pricing in only a slim chance rates will rise before the end of the year. "The market now thinks a rate hike around June is unlikely. So if the Fed does not change its tone, the market will take it as a bit more hawkish than expected," said Tomoaki Shishido, fixed income analyst at Nomura Securities. In commodity markets, oil prices were pressured by news U.S. oil stockpiles surged by nearly 13 million barrels last week. Brent crude oil LCOc1 dipped to $49.40 a barrel and U.S. crude oil futures CLc1 slipped to $45.57. [API/S][O/R] Safe-haven gold XAU= hovered at 1,290 an ounce while copper CMCU3, which has lost 25 percent in the last six months, climbed 1 percent. [MET/L]

Source