By Caroline Valetkevitch
NEW YORK (Reuters) - World stock indexes climbed and the dollar dipped on Thursday as minutes from the latest Federal Reserve meeting showed policymakers view low inflation as a hurdle to raising rates.
U.S. crude oil prices briefly traded above $50 for the first time since July and added to gains late after a closely watched oil forecaster predicted prices would climb to $75 over the next two years.
According to minutes from the Fed's Sept. 16-17 meeting, the central bank thought the economy was close to warranting an interest rate hike in September but decided it was better to wait for evidence that a global economic slowdown was not knocking the United States off course.
Though unsettled by signs of turmoil overseas, policymakers did not think this had "materially altered" the outlook for the economy, the minutes showed. The Fed decided to leave rates unchanged at the September meeting.
"They're actually validating the slow but steady recovery. We've had data since then that might make them a little more nervous," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts.
The Dow and S&P 500 added to gains following the minutes, while the Nasdaq turned higher. The S&P 500 closed above 2,000 and hit its highest level in seven weeks.
The Dow Jones industrial average (.DJI) rose 138.46 points, or 0.82 percent, to 17,050.75, the S&P 500 (.SPX) gained 17.6 points, or 0.88 percent, to 2,013.43 and the Nasdaq Composite (.IXIC) added 19.64 points, or 0.41 percent, to 4,810.79.
MSCI's all-country world equity index <.MIWD00000PUS> was up 0.5 percent, while the pan-European FTSEurofirst 300 (.FTEU3) ended 0.3 percent higher.
In Europe's growth engine, Germany, exports plunged 5.2 percent in August for their biggest monthly decline since the height of the global financial crisis.
A dollar index (.DXY) extended losses after the Fed minutes but quickly pared those declines and was last down 0.2 percent. Fading chances of a near-term rate hike have taken a toll on the dollar.
"The dollar is reacting negatively to the slightly more dovish comments about near-term prospects for inflation," said Patrick Maldari, senior fixed-income investment specialist at Aberdeen Asset Management in New York.
In the bond market, U.S. Treasuries prices fell as the minutes strengthened the view the central bank would not raise rates this year.
Benchmark 10-year Treasuries
Brent crude oil futures (LCOc1) rose $1.72 to settle at $53.05 a barrel, while U.S. crude futures (CLc1) settled up $1.62 at $49.43.
PIRA Energy Group, a closely watched forecaster that predicted the collapse in oil prices a year ago, said it sees crude prices at $70 per barrel by the end of 2016 and $75 a barrel in 2017.
That added to market gains, with Russia's military involvement in Syria brining a geopolitical risk premium into the market.
Gold briefly rallied following the Fed minutes but then turned lower. Spot gold (XAU=) eased 0.4 percent to $1,139.86 an ounce.
(Additional reporting by Sam Forgione and Sinead Carew in New York; Editing by Nick Zieminski and Cynthia Osterman)