Portugal Colonial - Markets mark time ahead to US Fed chair speech

With the Jackson Hole meeting of central bankers this week, focus is on what US Federal Reserve chief Jerome Powell will say Friday about plans to tackle high prices -- with many fearing higher borrowing costs could send the world's biggest economy into recession in its battle to rein in inflation.

The euro held close to a two-decade low against the dollar, and the greenback struck a two-year peak against China's yuan.

European gas prices rose close to record intraday prices.

- Losing momentum -

"Markets seem to have lost their momentum," noted AJ Bell investment director Russ Mould.

"Investors have become nervous once again, with all eyes on Powell and what he says this coming Friday."

Analyst Patrick O'Hare at Briefing.com said a mountain of expectations were building ahead of Powell's speech.

"Those expectations range from fear of a resolutely hawkish speech to hope of a tempered rate-hike outlook," he said.

Central banks face a delicate balancing act between battling inflation, with Russia's war in Ukraine sending energy prices soaring, and avoiding recession.

Yet concerns are growing that spiking energy costs could still prompt a worldwide downturn.

"Investor anxiety is growing that a combination of central banks raising rates and higher energy prices will tip the global economy into a long recession," said CMC Markets analyst Michael Hewson.

Key markets in Asia slid on Wednesday.

In Europe, London shed 0.5 percent but Frankfurt and Paris were broadly steady.

Wall Street opened narrowly mixed, with the Dow dipping 0.1 percent.

- Rollercoaster ride -

The foreign exchange market has faced a rollercoaster ride so far this week.

The euro tumbled on Tuesday to $0.9901 -- a new two-decade low -- but later clawed back losses as the greenback was hit by poor US economic data.

The dollar had strengthened this week ahead Powell's speech, as markets speculate that the Fed will continue to tighten its monetary policy.

Higher interest rates boost the American currency as they make dollar-denominated debt more attractive to investors.

But the euro also has been weighed down by a gloomy outlook for the eurozone economy amid fears of a halt to Russia's gas deliveries.

Oil was steady following talk of an OPEC output cut, with Brent crude hovering just above $100 per barrel.

"While this may simply be a case of Saudi Arabia talking up the price, for now, the prospect of the group taking such action effectively removes two of the biggest downside risks for prices," said OANDA analyst Craig Erlam.

Oil prices fell back under $100 per barrel this month on worries of a global economic slowdown and the possibility of Iran reaching a deal on its nuclear programme that would end international sanctions on its crude exports.

- Key figures at around 1330 GMT -

London - FTSE 100: DOWN 0.5 percent at 7,454.51 points

Frankfurt - DAX: DOWN 0.1 percent at 13,179.98

Paris - CAC 40: UP less than 0.1 percent at 6,364.87

EURO STOXX 50: UP less than 0.1 percent at 3,654.51

New York - Dow: DOWN 0.1 percent at 32,867.49

Tokyo - Nikkei 225: DOWN 0.5 percent at 28,313.47 (close)

Hong Kong - Hang Seng Index: DOWN 1.2 percent at 19,268.74 (close)

Shanghai - Composite: DOWN 1.9 percent at 3,215.20 (close)

Euro/dollar: DOWN at 0.9925 from 0.9970 on Tuesday

Pound/dollar: DOWN at 1.1763 from 1.1836

Euro/pound: UP at 84.38 pence from 84.23 pence

Dollar/yen: UP at 137.04 yen from 136.36 yen

West Texas Intermediate: UP less than 0.1 percent at $93.80 per barrel

Brent North Sea crude: UP less than 0.1 percent at $100.26

F.Cardoso--PC