FOREX-Dollar steady before Jackson Hole, kiwi drops on dovish RBNZ

By Samuel Indyk and Kevin Buckland

LONDON, Aug 20 (Reuters) - The U.S. dollar was little changed on Wednesday as traders awaited a speech from Federal Reserve Chair Jerome Powell at the annual Jackson Hole symposium later this week for clues on the monetary policy path.

The New Zealand dollar tumbled after the central bank reduced its cash rate by a quarter point to 3.0% as expected, and said its board had also considered a half-point cut.

The dollar index =USD, which measures the U.S. currency against six others, was flat at 98.319, after earlier touching a more than one week high of 98.441.

Friday's speech by Powell is the market's main focus, as traders watch for any pushback against market pricing of a rate reduction at the Fed's September 16-17 meeting.

Traders now place odds of about 85% on a quarter-point cut next month and expect about 54 basis points of reductions by year-end.

"Powell will try to be fairly balanced, but there is a risk we see a hawkish Powell on Friday," said Kirstine Kundby-Nielsen, FX analyst at Danske Bank.

"Some of the developments we've seen in inflation dynamics will keep the Fed more cautious."

Traders, who ramped up bets for Fed cuts after a surprisingly weak U.S. payrolls report at the start of this month, 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.

Powell has said he is reluctant to cut rates because of expected tariff-driven price pressures this summer.

Later on Wednesday, the Fed will issue the minutes of its meeting on July 29 and 30, when it held rates steady, although they may offer limited insight as the meeting came before the weak jobs numbers.

The kiwi NZD=D3 slumped as much as 1.3% to $0.5815, its weakest since April 11, with policymakers lowering their projected floor for the cash rate to 2.55%, from 2.85% forecast in May.

"The market did not expect the bank to send a strong dovish signal that it intends to deliver further cuts," Prashant Newnaha, a rates strategist at TD Securities, wrote in a client note. He has increased his forecast for additional easing, now projecting a cash rate of 2.5% by November.

The Swedish crown EURSEK=D3 was steady after its central bank maintained its policy rate at 2%, in line with expectations.

The euro EUR=EBS eased 0.1% to $1.1636. The greenback advanced 0.1% to 0.8078 Swiss franc CHF=EBS, though it edged down 0.1% to 147.61 yen JPY=EBS.

The pound rose slightly against the euro EURGBP=D3 and dollar GBP=D3 after hotter-than-forecast inflation, leaving Britain with the biggest price growth problem amongst the world's big rich economies.

But much of the rise in services inflation was driven by volatile airfares, which some economists said was due to the timing of the school holidays.

"The BoE (Bank of England) is more concerned about food inflation, which hasn't changed much in today's release," ING's head of research Chris Turner said.

"We doubt today's CPI release will alter much of the BoE's current thinking."

In cryptocurrencies, bitcoin BTC= hovered at around $113,897 after earlier dipping to the lowest since August 3 at $112,578.38, pressured by a strengthening dollar.

Ether ETH= was up 1.8% at $4,234.