Adds China, European stocks

By Wayne Cole

SYDNEY, Aug 19 (Reuters) -Asian stocks were taking a breather on Monday after global equities enjoyed their best week in nine months on expectations the U.S. economy would dodge a recession and cooling inflation would kick off a cycle of interest rate cuts.

The prospect of lower borrowing costs saw gold clear $2,500 an ounce for the first time and the dollar dip against the euro, though both the safe haven yen and Swiss franc receded as risk appetites recovered.

Federal Reserve members Mary Daly and Austan Goolsbee were out over the weekend to flag the possibility of easing in September, while minutes of the last policy meeting due this week should underline the dovish outlook.

Fed chair Jerome Powell speaks in Jackson Hole on Friday and investors assume he will acknowledge the case for a cut.

"Although it may be too early to declare victory - and central bankers will certainly be prudent to avoid this in their official rhetoric - the inflation scare that had dominated the policy debate since prices started to soar during the pandemic has now largely vanished," said Barclays economist Christian Keller.

"Inflation may not be quite at the 2% target yet, but it is close and going in the right direction."

Futures 0#FF: are fully priced for a quarter-point move, and imply a 25% chance of 50 basis points with much depending on what the next payrolls report shows. FEDWATCH

Analysts at Goldman Sachs cautioned that annual benchmark revisions to the jobs series are due on Wednesday which could see a large downward revision of between 600,000 and one million positions, though this would likely overstate the weakness of the labour market.

For now, the expectation of a softer than soft landing for the U.S. economy has S&P 500 futures ESc1 up 0.2% and Nasdaq futures NQc1 ahead by 0.3%, on top of last week's gains..N

EUROSTOXX 50 futures STXEc1 added 0.2% and FTSE futures FFIc1 eased 0.1%.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS edged up 0.7%, having rallied 2.8% last week.

Japan's Nikkei .N225 turned flat, following a near 9% bounce last week. Chinese blue chips .CSI300 firmed 0.6%.

The Fed is hardly alone in contemplating looser policy, with Sweden's central bank expected to cut rates this week, and possibly by an outsized 50 basis points.

In currency markets, the euro was steady at $1.1025 EUR=EBS, just below last week's top of $1.1047. The dollar stood at 147.79 JPY=EBS, having been as high as 149.40 last week. USD/

"The overall Fed message this week is likely to reassure market participants looking for confirmation that policy rate cuts are now imminent," said Jonas Goltermann, deputy chief markets economist at Capital Economics.

"As such, the greenback may well remain under pressure in the near term, although given the extent to which Fed easing is already discounted, we doubt there is that much further dollar weakness in store."

A softer dollar combined with lower bond yields to help gold hold at $2,500 an ounce XAU=, and near an all-time peak of $2,509.69. GOL/

Oil prices dipped again as concerns about Chinese demand continued to weigh on sentiment. O/R

Brent LCOc1 fell 6 cents to $79.62 a barrel, while U.S. crude CLc1 lost 11 cents to $76.54 per barrel.

Reporting by Wayne Cole; Editing by Christopher Cushing

To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA