Angela Merkel is meeting the Italian Prime Minister Mario Monti for talks on the euro zone crisis in Berlin later today.
The meeting comes ahead of an Italian debt sale that could cause further concern for the future of the euro. The two leaders will hold a joint press conference later after their meeting.
The euro, Asian shares and gold held steady in late trade yesterday.
Investors are awaiting US Federal Reserve Chairman Ben Bernanke's speech to international central bankers gathering in Jackson Hole on Friday and a European Central Bank meeting next week.
Expectations that Hurricane Isaac, which made landfall in southern Louisiana on Tuesday, would spare Gulf Coast oil production facilities from significant damage helped bring down Brent crude prices.
Otherwise, eyes were locked on central banks for any signs of further monetary easing from the United States, and from Europe, where the ECB meeting on Sept. 6 is due to discuss new measures to help European nations hardest hit by the debt crisis.
A request by Catalonia, Spain's most economically important region, for the central government to provide a €5 billion rescue to meet financing needs and debt costs has heightened fears that Spain will need a European bailout.
The euro traded at $1.2557, staying near a seven-week high of $1.2590 hit last week, and touched an eight-week high against the Australian dollar at A$1.2123 on optimism that Europe will take positive steps to tackle its debt crisis.
Bernanke's speech at Jackson Hole precedes the Fed's Sept. 12-13 policy meeting, and he has used the event in the previous two years to signal the Fed's easy policy intentions.
But 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 US recovery.
"Everybody's waiting, but I think Bernanke and the other central bankers are limited in what they can do to boost growth," said Wang Ao-chao, UOB Kay Hian's Shanghai-based head of research.
Key jobs data due early in September could still revive expectations for a powerful easing if numbers were weak.
In contrast, hopes remained fairly firm for chances that the European Central Bank will soon unveil measures to ease borrowing stress in struggling countries and take a step forward in containing the three-year euro zone debt crisis.
ECB President Mario Draghi cancelled his attendance of Jackson Hole due to a heavy workload as he gears up for the bank's critical policy-setting meeting on Sept. 6.
