The U.S. dollar held below its one-week high on Thursday (August 21st), and European stock markets opened flat as investors prepared for three days of potentially market-moving news from the Federal Reserve's annual symposium in Jackson Hole.

Central bankers from around the world will attend the event, which begins later, with the primary focus being Fed Chair Jerome Powell's speech on Friday, while traders try to gauge the chances of a September interest rate cut.

The pan-European STOXX 600 and Germany's DAX were little changed at the open. The UK's FTSE 100 rose 0.1%, while France's CAC 40 fell 0.1%. "I remain bullish on equities, and a dip-buyer, viewing the recent decline as an example of the loss of upward momentum from the market's peak," said Michael Brown, senior research strategist at Pepperstone.

Strong earnings growth, a resilient underlying economy, and calmer trade sentiment should all maintain upward momentum, while potential Fed policy easing is also likely to provide support.

Fundamental momentum for equities, which have been on the rise recently, remains strong, with the Australian benchmark index rising 0.9% to a record high. Other Asian indexes weakened but remained within striking distance of recent highs.

Japan's Nikkei, which hit an all-time intraday peak on Tuesday, fell 0.6%. South Korea's KOSPI rose 0.7%. The index fell to a six-week low on Wednesday, but remained within striking distance of the four-year high reached on July 31.

Nasdaq futures edged higher, following a 0.7% decline for the Nasdaq Composite overnight. S&P 500 futures were flat after the cash index fell 0.2%. Fed Chairman Powell said he was reluctant to cut interest rates due to expected price pressures driven by tariffs this summer.

Traders increased bets for a September interest rate cut following a surprisingly weak payrolls report earlier this month, and were further encouraged after consumer price data showed limited upward pressure from tariffs. However, higher-than-expected producer price data last week complicated the policy picture.

The minutes of the Fed's July meeting, released overnight, when policymakers decided to keep rates unchanged, showed that Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller were alone in pushing for a rate cut.

This led traders to reduce the odds to 80% for a quarter-point Fed rate cut on September 17, down from 84% 24 hours earlier. They now expect a total of 53 basis points of easing over the remainder of the year.

President Donald Trump reiterated pressure on the central bank overnight, and that pressure will remain a key focus for traders. His push for greater control over the Fed unsettled investors earlier in the year, causing the dollar to plummet.

After continuing his attacks on Powell earlier in the week for refraining from cutting interest rates this year, Trump on Wednesday targeted Fed Chair Lisa Cook, demanding her resignation amid allegations of mortgage-related misconduct on properties she owns in Georgia and Michigan. (alg)

Source: Reuters