(Reuters) - The euro remained firm while Asian shares steadied Wednesday as investors awaited U.S. Fed Chairman Ben Bernanke's Friday speech for signs of whether the bank will opt for more monetary stimulus and a European Central Bank policy meeting next week.
The euro rose to an eight-week high against the Australian dollar at A$1.2123 as investors clung to optimism for Europe taking positive steps to tackle its debt crisis. The euro traded at $1.2566 on the U.S. dollar, hovering near a seven-week high of $1.2590 hit last week.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> were little changed, after hitting a three-week low on Tuesday, and the Nikkei stock average <.N225> opened up 0.1 percent after closing at its lowest level in two weeks. .T
All eyes are fixed on Bernanke's speech on Friday at an annual Jackson Hole, Wyoming, meeting of central bankers and economists, which precedes the Fed's Sept. 12-13 policy meeting. He has used the event in the previous two years to signal the Fed's easy policy intentions.
Fed policymakers have not agreed at this point to a new round of stimulus, Dallas Federal Reserve Bank President Richard Fisher told Reuters in a phone interview on Tuesday.
"In terms of further easing, nothing has been decided," said Fisher, a non-voting member on the Fed this year. "Nothing is predestined.
Investors have become less certain of getting any policy hint from Bernanke this week or strong monetary stimulus from the Fed's meeting next month, as data released over the past month has generally pointed to a modest U.S. recovery.
Tuesday's Standard & Poor's/Case-Shiller housing price index showed home prices rose for a fifth month in a row in June, but consumer confidence reached its lowest in nine months in August. A key jobs data due early in September could still revive expectations for a powerful easing if numbers were weak.
"We don't believe that Bernanke will pre-commit the Fed at the JH conference (especially given the important upcoming Payrolls release on 7 September)," Societe Generale said in a research note.
"In fact, Bernanke may use the opportunity to highlight the limitations of what central banks can do. Thus, there is a risk that markets (especially the equity markets) will react with disappointment," it added.
Hopes remain relatively firm for the European Central Bank to soon unveil measures to ease borrowing stress in struggling countries such as Spain and Italy.
ECB President Mario Draghi canceled his appearance at the Jackson Hole venue due to a heavy workload as he gears up for the bank's critical policy-setting meeting on September 6, with markets looking for details of a new bond-buying plan.
Such expectations have helped reduce borrowing costs especially at the shorter end of the yield curve, offsetting concerns over Spain's fiscal woes.
Spain's most economically important region, Catalonia, said it needed a major rescue from Madrid, refueling fears the country may soon have to ask for a European rescue package to reduce its debt costs as the austerity measures, aimed at slashing the public deficit, push its economy deeper into recession.
"The euro continued grinding higher as the market likely continued to square underweight Euro positions ahead of an imminent European policy response," Barclays Capital analysts said in a note.
"But policy action does not necessarily translate into more growth," they said, adding that one risk that remains is elevated earnings estimates.
Oil prices fell, with U.S. crude down 0.2 percent at $96.11 a barrel and Brent down 0.2 percent at $112.37.
Oil rose on Tuesday as Hurricane Isaac approached the U.S. Gulf Coast, forcing companies in the region to close down oil production platforms and refineries.
Late on Tuesday, Group of Seven finance ministers issued a statement urging oil-producing countries to raise output to ensure the market is well supplied, while warning that Western nations were ready to tap strategic oil reserves to offset rising prices that could hurt global growth.