Portugal Colonial - Equities drift higher ahead of 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.

Many fear higher borrowing costs could send the world's biggest economy into recession in its battle to rein in inflation.

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

European gas prices soared to more than 300 euros per megawatt hour just as equity markets closed, as another temporary cut off of Russian deliveries via pipeline to Germany approached.

- Losing momentum -

"European markets have traded in a lacklustre manner today as higher gas prices serve to contain any attempt to push strongly higher," said market analyst Michael Hewson at CMC Markets UK.

"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."

Expectations have been building ahead of Powell's speech.

"Those expectations range from fear of a resolutely hawkish speech to hope of a tempered rate-hike outlook," said analyst Patrick O'Hare at Briefing.com.

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.

Key markets in Asia slid on Wednesday.

In Europe, London shed 0.2 percent but both Frankfurt and Paris posted modest gains.

On Wall Street, the Dow added 0.4 percent in late morning trading.

- 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 of 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 prices wobbled following recent gains on talk of an OPEC output cut, with Brent crude hovering just below $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 1530 GMT -

New York - Dow: UP 0.4 percent at 33,051.10 points

EURO STOXX 50: UP 0.3 percent at 3,669.85

London - FTSE 100: DOWN 0.2 percent at 7,471.51 (close)

Frankfurt - DAX: UP 0.2 percent at 13,220.06 (close)

Paris - CAC 40: UP 0.4 percent at 6,386.76 (close)

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: UP at 0.9975 from 0.9970 on Tuesday

Pound/dollar: DOWN at 1.1804 from 1.1836

Euro/pound: UP at 84.48 pence from 84.23 pence

Dollar/yen: UP at 136.85 yen from 136.36 yen

West Texas Intermediate: DOWN 0.7 percent at $93.11 per barrel

Brent North Sea crude: DOWN 0.9 percent at $99.35

P.Sousa--PC