Volkswacht Bodensee - Equities move 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 the ongoing campaign to tackle high prices.

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

The euro sunk close to a two-decade low against the dollar before rebounding, 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.

US natural gas prices also continued to rise to post-2008 highs.

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

- 'A lot of tightening' -

On Wall Street, shares ended a three-day skid, with the broad-based S&P 500 rising percent, but expectations have been building ahead of Powell's speech.

Oanda analyst Edward Moya said the "Fed still has a lot of tightening to do."

"Today's rebound is small and on light volume, which means most traders are playing the waiting game until Fed Chair Powell's Jackson Hole Symposium speech," he said.

"Powell's fight against inflation might send the US economy into a recession late next year, but for now he needs to stick to the hawkish script."

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.

- 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 tepid US economic data.

The dollar had strengthened this week ahead of Powell's speech, amid prospects 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 pushing back above $100 a barrel.

Oil prices had dropped below $100 this month on worries of a global economic slowdown and the possibility of Iran reaching a deal on its nuclear program that would end international sanctions on its crude exports and boost global supply.

- Key figures at around 2000 GMT -

New York - Dow: UP 0.2 percent at 32,969.23 points (close)

New York - S&P 500: UP 0.3 percent at 4,140.77 (close)

New York - Nasdaq: UP 0.4 percent at 12,431.53 (close)

EURO STOXX 50: UP 0.3 percent at 3,667.46

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 0.9967 from 0.9970 on Tuesday

Pound/dollar: DOWN at 1.1797 from 1.1836

Euro/pound: UP at 84.49 pence from 84.23 pence

Dollar/yen: UP at 137.06 yen from 136.36 yen

West Texas Intermediate: UP 1.2 percent at $94.89 per barrel

Brent North Sea crude: UP 1.0 percent at $101.22

J.Bergmann--BTB