The program is the bank's flagship tool in a new stimulus package it hopes will stave off deflation and revive the ailing euro zone economy. Traders polled by Reuters expect just over 130 billion euros to be taken in Thursday's round.

"The question is, how will the market react to the number?" said Elwin de Groot, euro zone strategist at Rabobank. "We think a low uptake (100 billion euros) will only fuel expectations of QE (asset purchases with new money) further down the line and that will put pressure on rates."

"If it is really above that, the market could interpret it as reducing the chances of QE. But at the same time it would increase excess money market liquidity. So in that scenario you could see quiet a bit of steepening (of the yield curve)."

German bond yields DE10YT=TWEB rose in early trading in the wake of the Fed's projected future rate rises although pressure on shorter-dated bonds was cushioned by the ECB.

While the Fed maintained language suggesting that rate hikes would not happen for a "considerable time," it also indicated Fed policymakers think it could raise borrowing costs faster than expected when it starts moving. [TOP/CEN]

The upshot was that the euro EUR= skidded to a 14-month trough before stabilising, while gold XAU= hit an eight-month low as the dollar swept higher across the board, a move many investors have been itching to wager on all year.

"The Fed clearly signaled overnight that although it is not imminent, they are increasingly confident they will start raising rates next year," said Lee Hardman, a strategist with Bank of Tokyo-Mitsubishi UFJ in London.

FED GONE, SCOTS AWAY?

In Asian markets, the reception was mixed, with MSCI's index of ex-Japan Asian shares falling to 12-week lows, on the spectre of rising U.S. rates and slower economic growth in China.

A weaker yen is generally viewed as positive for Japanese exports and company earnings though and helped lift the Nikkei .N225 1.1 percent to its highest level since January and the broader Topix index .TOPX to ground not visited since 2008.

The dollar began European trading almost 1.5 percent higher against the yen than 24 hours earlier, at 108.87 yen JPY=.

Futures markets <0#FF:> still lean more towards a Fed rate move in June. But whatever the timing, U.S. rates do seem certain to be heading higher while central banks in the euro zone and Japan remain committed to super-easy monetary policy.

Bond investors reacted with more calm than those in currency markets, and nudged yields on the benchmark 10-year note US10YT=RR up a modest 2 basis points to 2.62 percent.

Still, a rise in two-year yields US2YT=RR to 0.57 percent widened their premium over German debt to 63 basis points, the fattest margin since early 2007.

With the Fed out of the way, the next big test for markets will be Thursday's referendum on Scottish independence.

The latest opinion poll by Survation showed support for staying in the United Kingdom at 53 percent, giving sterling a mild lift. The pound was at $1.63 GBP=D4, having been as low as $1.6052 earlier in the month.

In commodities, the rise of the dollar was a dead weight on prices. Gold steadied at $1,223.21 an ounce XAU= after having touched an eight-month trough of $1,216.01.

Oil prices were further pressured by a government report showing U.S. crude stocks rose sharply last week.

Brent crude LCOc1 and U.S. crude Clc1 were both down 0.5 percent on Thursday at $98.50 a barrel and $94.10, respectively.