GLOBAL MARKETS-Stocks pare losses, dollar falls after balanced Fed minutes

* Minutes from July Fed policy meeting seen as balanced

* Wall Street stocks erase early losses after Fed statement

* Fed seen with bias to raise rates but in no rush

* Dollar turns negative after Fed minutes (Updates to afternoon trading, adds quotes, information on Fed minutes)

By Dion Rabouin

NEW YORK, Aug 17 (Reuters) - Wall Street stocks turned positive and the dollar turned negative on Wednesday after minutes from the Federal Reserve's July meeting showed policymakers may be on the road to raising U.S (Other OTC: UBGXF - news) . interest rates but will need to see more economic data before pulling the trigger.

The U.S. central bank left benchmark short-term rates unchanged at its last meeting in July but said near-term risks to the economy had diminished, leaving the door open for a possible rate hike this year.

The minutes from that meeting were released Wednesday and while they showed the Fed could be leaning towards raising rates they did not suggest it was in any hurry to do so, analysts said.

"It (Other OTC: ITGL - news) 's broadly consistent with the message we got with the (July) statement, which is that, by acknowledging that near-term risks have diminished, it was an ever-so-slight and incremental step towards signaling a rate hike at some point. But the timing of that is still indeterminate," said Thomas Simons, money market economist at Jefferies of the statement detailing the meeting's minutes.

New York Fed President William Dudley and Atlanta Fed chief Dennis Lockhart both said on Tuesday that the Fed could raise rates at its next meeting in September.

The Dow Jones industrial average rose 3.08 points, or 0.02 percent, to 18,555.1, the S&P 500 gained 0.76 points, or 0.03 percent, to 2,178.91 and the Nasdaq Composite dropped 4.14 points, or 0.08 percent, to 5,222.97.

Analysts said the balanced statement tempered potential enthusiasm from bullish dollar investors who had hoped to see a more firm stance toward raising rates from the policy-setting Federal Open Market Committee. That pushed the dollar downward, erasing its early, tepid gains.

"The data since the July meeting has not been outstanding, it has been a little mixed if not poor," said Chris Gaffney, president of Everbank World Markets in St. Louis. "So these minutes don't support an interest rate increase sooner rather than later and therefore I think the dollar is going to continue to falter a bit here."

Emerging markets equities pared their losses after the release of the minutes, with reduced expectations for a near-term rate hike from the Fed providing a boost to EM countries, many of which hold dollar-denominated debt. But most markets remained down on the day. MSCI (NYSE: MSCI - news) 's emerging markets index was last down 0.65 percent.

The dollar index, which tracks the U.S. currency against six major rivals, was down 0.03 percent to 94.761.

Longer-dated U.S. Treasury prices added to earlier gains after the minutes.

Benchmark 10-year Treasury notes were up 10/32 in price for a yield of 1.542 percent, down 3 basis points from late on Tuesday.

Oil prices were positive, with Brent crude touching its highest since July 5. Crude oil futures initially rose after U.S. Energy Information Administration weekly figures showed a larger-than-expected draw in inventories and added to gains following the Fed minutes.

Brent crude prices were last up 1.3 percent to $49.86 per barrel. U.S. WTI crude prices gained 0.6 percent to $46.85, the highest since July 12.

(Reporting by Dion Rabouin; Editing by James Dalgleish)