LONDON/SINGAPORE, Aug 24 (Reuters) - The dollar edged up on Thursday as investors were cautious after softer-than expected economic data muddied interest rate outlook ahead of the Federal Reserve's Jackson Hole symposium, while the Turkish lira awaited for a central bank rate decision.
The safe-haven dollar index, which measures the greenback against a basket of six major currencies, rose 0.15% to 103.50, bouncing from Wednesday's drop, but was still set for a monthly rise.
On Wednesday, 10-year U.S. yields recorded their sharpest one-day slide in more than three months after data showed U.S. business activity growth in August was its weakest since February as the economy seems to be starting to stall.
In the meantime, surveys showed that Europe's manufacturing output continued to shrink and services activity fell into decline, dampening any boon for the euro. The single currency fell 0.07% to $1.0857.
British factory output slumped, leaving the economy on course for recession. The pound fell 0.3% to $1.2703.
"PMI data suggests that the outlook is not as great as one would hope and that might suggest some caution on the part of developed market central banks in terms of further tightening," said Bank of Singapore currency strategist Moh Siong Sim.
Moves were small as traders were cautious in case of possible surprises when Fed Chair Jerome Powell speaks at Jackson Hole on Friday.
"As the Jackson Hole Symposium gets under way, market participants are looking for direction," said Isabel Albarran, Investment Officer at Close Brothers Asset Management.
"Talk of stronger-than-expected data could point to ongoing inflation concerns, while a focus on the cooling labour market, weak PMIs and downward trending CPI may point to rates being close to the peak," she added.
Elsewhere, the Turkish lira stood at 27.2200 against the dollar ahead of Turkey's central bank rate decision for August, due at 1100 GMT.
The central bank is expected to raise its policy rate to 20% from 17.50%, according to the median estimate in a Reuters poll, but some economists expect a smaller hike.
Turkey's central bank embarked on a tightening cycle in June after President Tayyip Erdogan appointed former Wall Street banker Hafize Gaye Erkan as governor.
But there is uncertainty around how much further can it go and that has added pressure on the lira, said Tatha Ghose, FX analyst at Commerzbank.
"We may learn something about future intentions from the statement today and this would be valuable information. Otherwise, generic promises... will hardly convince the FX market," he said.
China's yuan, which has been supported by state-bank buying in recent sessions, steadied at 7.2769 per dollar.
(Reporting by Joice Alves and Tom Westbrook, additional reporting by Ankur Banerjee. Editing by Angus MacSwan)
