FOREX-Euro weakens, dollar rises as market awaits Fed's Powell

* New Zealand dollar gains as rates views shift
* Pound gives back some gains, but stays above $1.22
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Olga Cotaga
Aug 23 (Reuters) - The euro edged lower and the dollar
strengthened broadly on Friday, awaiting a keynote speech by the
head of the Federal Reserve after some of his fellow
policymakers signalled reluctance to cut U.S. interest rates
further.
Fed Chairman Jerome Powell is expected to address the
Jackson Hole symposium of central bankers at 1400 GMT, and
traders will be keen to see how closely he allies himself with
the hawkish camp.
Currency markets have in recent months been driven by global
central banks' shift to more accommodative policy settings as
economic demand slows and trade disputes intensify.
Expectations that the Fed will cut rates at its next meeting
in September are still very high, according to interest rate
futures, but the currency market is likely to react if the tone
of Powell's comments does not match these dovish expectations,
analysts said.
"I would expect him to stress that the U.S. economy is
strong enough that...just a rate cut or two, taken out as
'insurance', will be enough to keep the recovery on track," said
Marshall Gittler, chief strategist at ACLS Global.
"That's probably more hawkish than what the market is
expecting and could be positive for the dollar."
The euro was down 0.1% at $1.1067 after falling to a
three-week low of $1.1061 earlier EUR=EBS . The index which
tracks the dollar against six major currencies .DXY was up by
0.2% at 98.35.
The euro attempted to stage a relief rally the day before
following the stronger-than-expected euro zone purchasing
managers' surveys for August, but the gains proved short-lived.
The PMIs will keep "pressure on the European Central Bank to
deliver further stimulus to support growth" in the euro area
because "surveys remain consistent with weak growth continuing
in the third quarter," said Lee Hardman, currency analyst at
MUFG.
Views that rates may not go as low as previously expected
also bolstered the New Zealand dollar after its central bank
chief said he was "pleased" with where interest rates were.
Reserve Bank of New Zealand Governor Adrian Orr told
Bloomberg TV he could afford to pause on monetary policy after
50-basis-point cut this month. The New Zealand dollar jumped from a three and-a-half-year
low of $0.6362 reached Thursday, trading up 0.4% at $0.6387
NZD=D3 .
China's offshore yuan stabilized at 7.0920 CNH=EBS after
dropping to an 11-day low of 7.1072 overnight as the People's
Bank of China lowered its official yuan midpoint to an 11-year
low. Still, the move was limited given that the set rate was
nowhere near the lows traders were expecting.
The pound gave back some of the gains it made on Thursday on
the back of German Chancellor Angela Merkel giving Britain 30
days to come up with a Brexit plan, dropping 0.4% to $1.2208
GBP=D3 . Against the euro, it fell 0.3% at 90.66 pence
EURGBP=D3 .