(Updates with European stocks open in headline, 1st, 3rd

paragraphs. Adds analyst comment in 18th-20th paragraphs.

Updates prices.)

*

Fed symposium starts Thursday with focus on Powell's

speech

Friday

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Traders hungry for hints on whether Fed will cut rates in

September

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Trump raises pressure on Fed with demand for Governor Cook

to

resign

By Kevin Buckland

TOKYO, Aug 21 (Reuters) - The U.S. dollar hovered below

a one-week high on Thursday and European stock markets opened

flat as investors braced 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 in the day, with the key focus on Fed Chair

Jerome Powell's speech on Friday as traders try to gauge the

chances of a September rate cut.

The pan-European STOXX 600 index and Germany's DAX

were little changed at the open. Britain's FTSE 100

rose 0.1%, while France's CAC 40 fell 0.1%.

"I remain an equity bull, and a buyer of dips, viewing this

recent swoon as more of an example of some froth being taken off

the top of the market," said Michael Brown, senior research

strategist at Pepperstone.

"Strong earnings growth, a resilient underlying economy, and

calmer tone on trade, should all keep the path of least

resistance higher, while any potential Fed easing would probably

provide a helping hand as well."

Underlying momentum for equities, which have been on a tear

of late, remained strong with Australia's benchmark

rallying 0.9% to hit a record. Other indexes in Asia lost some

ground but haven't strayed too far from recent highs.

Japan's Nikkei, which hit an all-time intraday peak

on Tuesday, drooped 0.6%. South Korea's KOSPI bounced

0.7%. It dipped to a six-week low on Wednesday, but is not too

far off from a four-year high marked on July 31.

Nasdaq futures pointed slightly higher, following a

0.7% slide for the Nasdaq Composite overnight. S&P 500

futures were flat after the cash index slipped

0.2%.

Fed Chair Powell has said he is reluctant to cut rates

because of expected tariff-driven price pressures this summer.

Traders ramped up bets for a September cut following a

surprisingly weak payrolls report at the start of this month,

and were further encouraged after consumer price data showed

limited upward pressure from tariffs.

However, a hotter-than-expected producer price reading last

week complicated the policy picture.

Minutes out overnight from the Fed's July gathering, when

policymakers voted to keep rates steady, suggested that Fed Vice

Chair for Supervision Michelle Bowman and Governor Christopher

Waller were alone in pushing for a rate cut.

That led traders to pare back odds to 80% for a

quarter-point Fed rate cut on September 17, down from 84% 24

hours earlier. They are currently pricing in a total of 53 basis

points of easing over the rest of the year.

President Donald Trump again exerted pressure on the

central bank overnight and that pressure is set to remain a key

focus for traders. His push for more control over the Fed

unnerved investors earlier in the year, sending the dollar

tumbling.

After continuing his attacks on Powell earlier in the week for

refraining from cutting rates this year, Trump on Wednesday

targeted Fed Governor Lisa Cook, demanding she resign amid

allegations of wrongdoing connected to mortgages on properties

she owns in Georgia and Michigan.

Cook said she had "no intention of being bullied to step

down".

"Trump's push to confirm Stephen Miran could add another

vote for cuts in September, and if he was to successfully remove

Cook, the Fed Board could end up with four members out of seven

supporting his lower rates call," said Rodrigo Catril, a

strategist at National Australia Bank.

Trump nominated Council of Economic Advisers Chair Miran as

a Fed governor earlier this month, following the surprise

resignation of Adriana Kugler.

The main topic of the Jackson Hole conference will be labour

markets, which is a relief to some traders who worried that

policymakers would put a spotlight on inflation or the sensitive

issue of central bank independence, said Toshinobu Chiba, a fund

manager at Simplex Asset Management.

"A lot of active managers, including me, believed there was

a chance central bankers could show a hawkish stance at this

meeting," said Tokyo-based Chiba. "But when I think about this

theme, the possibility of that scenario has decreased."

"The U.S. labour market has weakened recently, as we have

seen in the employment results this month, so like Powell has

mentioned, the possibility for a rate cut is open," he added.

The currency market has largely taken the latest

developments in stride. The dollar index was steady at

98.33 on Thursday, after grinding to its highest since August 12

at 98.441 a day earlier.

U.S. two-year Treasury yields, which tend to be

sensitive to monetary policy expectations, rose 1.2 basis points

to 3.756% on Thursday, while 10-year yields rose 0.8

basis points to 4.304%.

Japanese government bond yields edged higher, with the 20-year

yield advancing to 2.655% for the first time

since late 1999 and the 10-year yield rising to

its highest since October 2008 at 1.610%. Investors are wary of

increased fiscal spending amid pressure for the Japanese prime

minister to step down.

The dollar advanced 0.2% to 147.58 yen.

The euro and sterling were flat at

$1.1641 and $1.3446, respectively.

Gold eased 0.3% to around $3,338 per ounce.

Oil prices rose as larger-than-expected declines in crude

oil and fuel inventories in the U.S. supported expectations for

steady demand.

Brent crude futures were up 0.9% to $67.47 a barrel,

after gaining 1.6% in the previous session. U.S. West Texas

Intermediate (WTI) crude futures rose 1.1% to $63.37,

after climbing 1.4% on Wednesday.