Stock markets struggled for direction and the dollar dipped Wednesday, with all eyes on the size of the Federal Reserve's latest US interest-rate hike to cool inflation.

Analysts expect the Fed to raise its rate by 25 basis points, which would be less aggressive than December's half-point increase, as inflation in major economies eases back from the highest levels in decades.

The European Central Bank and Bank of England announce their latest interest-rate decisions on Thursday.

Ahead of the European announcements, data Wednesday showed the eurozone's annual inflation rate slowing further.

"A lot is riding on the Fed dialling back the pace of rate hikes to 25 basis points and there will also be plenty of attention on the surrounding messaging from chair Jerome Powell and his colleagues," said AJ Bell investment director Russ Mould.

"Helping the market's mood... was data that revealed slowing US wage growth, another signal that inflationary pressures have peaked."

For Fawad Razaqzada, market analyst at City Index and FOREX.com, "Fed Chair Jerome Powell is likely to keep further hikes on the table and lean against bets they will cut later this year, something which may get interpreted as being hawkish."

On Wall Street, the Dow Jones index was off 0.5 percent shortly after opening and the tech heavy Nasdaq slipped 0.3 percent while major European indices crept just into the green some two hours out from the close.

Asia's main stock markets earlier closed higher, rebounding from two days of losses.

The gains will provide some relief to investors after January's rally appeared to have hit the buffers this week on lingering concerns about the economic outlook.

"Wall Street is slowly growing confident that this week's Fed rate hike might end up being the last one in this tightening cycle," said Edward Moya, analyst at OANDA trading group.

All three main indexes on Wall Street ended more than one percent higher Tuesday, helped by strong earnings from big-ticket firms including ExxonMobil and General Motors.

In India on Wednesday, Mumbai managed to rally around 1.9 percent, despite more heavy selling of tycoon Gautam Adani's business empire.

The group has shed about one third of its value, or $76 billion, following allegations of massive accounting fraud from a US investment group.

Shares plunged in Adani Total Gas and flagship Adani Enterprises, piling on the misery.

Key figures around 1445 GMT

New York - Dow: DOWN 0.5 percent at 33,922.02 points

London - FTSE 100: UP 0.1 percent at 7,781.59

Frankfurt - DAX: UP 0.4 percent at 15,182.70

Paris - CAC 40: UP 0.1 percent at 7,091.63

EURO STOXX 50: UP 0.3 percent at 4,177.50

Tokyo - Nikkei 225: UP 0.1 percent at 27,346.88 (close)

Hong Kong - Hang Seng Index: UP 1.1 percent at 22,072.18 (close)

Shanghai - Composite: UP 0.9 percent at 3,284.92 (close)

Euro/dollar: UP at $1.0903 from $1.0870 on Tuesday

Pound/dollar: UP at $1.2338 from $1.2322

Euro/pound: UP at 88.38 pence from 88.18 pence

Dollar/yen: DOWN at 129.41 yen from 130.10 yen

Brent North Sea crude: DOWN 0.1 percent at $85.35 per barrel

West Texas Intermediate: UP 0.2 percent at $79.06 per barrel