* All eyes on Jackson Hole meeting, euro/dollar flat
* Euro little moved by Italian PM's resignation
* Sterling weakens as Johnson heads to Germany
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Adds details, updates prices)
By Tommy Wilkes
LONDON, Aug 21 (Reuters) - The euro struggled to make
headway against a resilient dollar on Wednesday while foreign
exchange markets remained largely calm ahead of a crucial
meeting of central bankers later this week.
After markets rushed over the last two months to price in
significant easing from central banks in the United States and
Europe, the outlook for euro/dollar will depend largely on
whether or not policymakers live up to those expectations.
Officials from major central banks will gather at Jackson
Hole, Wyoming, on Friday with markets focused on a scheduled
speech by U.S. Federal Reserve Chair Jerome Powell.
The speech comes after last week's inversion of the U.S.
yield curve - widely regarded as a recession signal - boosted
expectations the Fed would cut interest rates again at its
September policy meeting.
"In the big scheme of things, markets are relatively
range-bound, with the focus on Jackson Hole later this week,"
said Manuel Oliveri, a strategist at Credit Agricole (PA:CAGR).
The euro weakened marginally to $1.1097 EUR=EBS . The
single currency has moved little since Italy's Prime Minister
Giuseppe Conte resigned on Tuesday, as some investors believed
the move made a snap general election less likely. The dollar, measured against a basket of currencies, edged
higher to 98.228 .DXY .
Oliveri expects the euro to strengthen towards $1.12 by
September, even though the European Central Bank will struggle
to exceed investor expectations for cutting rates.
Talk of more fiscal spending in Germany, and the hit to the
U.S. yield advantage from falling interest rates, should support
the euro, he added.
"Fiscal stimulus is a positive for the currency," he said.
The dollar has also been supported by talk of more spending
- U.S. President Donald Trump said on Tuesday his administration
was considering potential tax cuts on wages as well as profits
from asset sales. Elsewhere, sterling was the big focus as British Prime
Minister Boris Johnson heads to Berlin to meet Chancellor Angela
Merkel for talks over Brexit.
The pound briefly jumped on Tuesday after Merkel raised the
possibility of practical solutions to the so-called backstop -
an insurance policy for the Irish border after Brexit - which
London opposes, but also reiterated that the EU would not reopen
the Withdrawal Agreement on Britain's exit from the EU.
Analysts say the pound is vulnerable should any positive
noises emerge from Johnson's meeting with Merkel after investors
this month ramped up their bets against the currency.
Sterling was last down 0.4% at $1.2126 GBP=D3 and 0.4%
lower versus the euro at 91.52 pence EURGBP=D3 .
The dollar rose against the yen, rising 0.2% to 106.48
JPY=EBS and further away from the 7-month high of 105.05 the
Japanese currency hit last week.
MUFG analysts said the dollar was rising against the yen
after Trump said he wanted to introduce new tax cuts and on
reports that negotiations to agree a U.S.-Japan trade deal were
making progress. "While trade talks are ongoing, it will be more difficult
for Japan to express concern over a stronger yen given President
Trump's concerns over currency manipulation," the analysts
wrote.
The Swedish crown, which has fallen in August as investors
concerned by the prospect of a global economic downturn bought
into safe havens, rose 0.4% against the euro to 10.709 crowns
per euro EURSEK=D3 . It climbed versus the dollar SEK=D3 ,
while the Norwegian crown was also stronger. EURNOK=D3
NOK=D3
Euro vs U.S. dollar https://tmsnrt.rs/2Nn685C
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(Editing by Toby Chopra and Susan Fenton)