Brazilian stocks seesawed in early trading on Wednesday, as investors stayed cautious ahead of a statement from U.S. central bank policymakers on a possible recovery in the world's largest economy.

The benchmark Bovespa index .BVSP was last up 0.78 percent to 56,195.40 points in midday trading, after earlier trading in negative territory.

Brazil's currency, the real BRBY, strengthened 0.33 percent to 1.837 reais per dollar. The real has gained 27 percent this year.

The U.S. Federal Reserve concludes a two-day meeting on Wednesday. The Fed is expected to end its buying program of long-term government securities, but keep U.S. interest rates steady at near zero amid signs the economy is stabilizing from a deep recession.

The Fed's accompanying statement will also be heavily scoured for clues about the health of the U.S. economy, possible exit strategies for looser monetary policy and hints of further government action.

The statement is expected around 3:15 p.m. local time (1815 GMT).

The market here is going to oscillate between positive and negative without marked definition until about 3:15 p.m., said Alvaro Bandeira, chief economist with Agora Corretora. Brazil is going to spend the day waiting.

Adding to volatility, the Bovespa index futures contract due in August expires on Wednesday.

State-controlled energy giant Petrobras (PETR4.SA) added 1.44 percent to 31.67 reais as crude oil CLc1 rose 2 percent ahead of the release of U.S. weekly oil statistics.

Mining company Vale (VALE5.SA), the world's largest iron ore producer, advanced 0.56 percent to 32.53 reais.

Petrobras and Vale have the heaviest weighting in the Bovespa index.

Airliner Gol (GOLL4.SA) soared 7.23 percent to 17.05 reais as the country's second-largest airline posted on Tuesday its second straight profit in seven quarters, citing lower fuel and repair expenses and lower debt-servicing costs thanks to a stronger real.

The tendency is for the Bovespa to stay positive, said Max Bueno, an analyst with Spinelli Corretora. Corporate results have lately pleased investors, with a few exceptions.

Limiting gains was Itau Unibanco (ITUB4.SA), Latin America's largest bank by assets. The stock shed 0.95 percent to 34.23 reais, one day after the bank announced a drop in second-quarter recurring profit on increased provisions for bad debts.

The 19-commodity Reuters-Jefferies index .CRB added 0.25 percent. The Bovespa index includes a number of stocks tied to commodities.

Yields on Brazilian interest rate futures contracts <0#DIJ:> due through mid-2011 largely slipped, with yields on contracts due beyond mostly flat or inching up.

The yield on the contract due January 2011 DIJF1 fell to 9.78 percent from 9.83 percent. The yield on the contract due January 2010 DIJF0 dipped to 8.64 percent from 8.65 percent.

The two were among the most highly-traded contracts of the morning.