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(Updates prices)
* European shares -1% on the week, oil at 8-wk high
* All eyes on Fed, Jackson Hole meeting next week
* Oil snaps 6-day rally on hopes of production cuts
* U.S. dollar stuck near 8-wk lows vs euro
* European earnings f'casts: http://reut.rs/2553txN
By Vikram Subhedar
LONDON, Aug 19 (Reuters) - European shares were poised topost their biggest weekly loss in two months on Friday whilecrude oil snapped its winning streak after a weaker dollar andhopes of production cuts had lifted prices to eight-week highs.
With the corporate earnings season in the United States andEurope largely out of the way, the focus is back on the U.S.Federal Reserve and whether it decides to raise interest rates.
Mixed messages from the Fed in recent days have leftinvestors cagey before next week's annual meeting of centralbankers from around the world in Jackson Hole, Wyoming, at whichFed Chair Janet Yellen is likely to cement expectations for aslow pace of rate increases.
European shares fell 0.6 percent on the day and areoff 1 percent for the week, their biggest weekly loss since mid-June. The index is down 6.7 percent this year, but hasrebounded 11 percent from its post-Brexit vote low.
S&P 500 e-mini futures were off 0.3 percent pointingto a lower open on Wall Street. All major U.S. stock indices arestill holding near record highs.
Volumes have thinned out in Europe with the summer lullkicking in. Thursday's session was the quietest in terms oftrading activity across Europe's stock exchanges in nearly threemonths, according to Thomson Reuters data.
"We continue to forecast a 'fat and flat' market forequities across regions for the remainder of 2016," GoldmanSachs said in a note to clients, suggesting that while theinvestment bank does not forecast a big slide, catalysts forfurther gains remain elusive.
"There is the risk of shocks due to elevated politicaluncertainty in (the second half) and the potential for bothmonetary and fiscal stimulus disappointments," it said.
All major sectors were in the red in Europe though indexesreceived some support from energy sector heavyweights such as BP and Statoil which rose on the back of earlierrises in oil prices.
Brent crude fell 0.3 percent ending a six-day run ofgains as weak fundamentals countered a lift in sentiment overtalks next month on a possible output freeze.
In currency markets, uncertainty around Fed rate hikes hashurt the U.S. dollar which was poised for a weekly loss againstits major counterparts and remained mired near eight-weeklows against the euro.
"The dollar has just been trading on the back foot really,"said Lee Hardman, a strategist with Bank of Tokyo-Mitsubishi inLondon.
"The market is generally of the view that the Fed isn'tgoing to raise rates any time soon. That leaves the dollarvulnerable in the near term," Hardman said.
The dollar index, which tracks the greenback against abasket of six major rivals, was down 1.4 percent for the week,though it rose 0.3 percent on Friday to 94.421. It hadfallen as low as 94.077 on Thursday, its weakest since June 23.
The euro dipped 0.2 percent to $1.1324, still up 1 percenton the week while the yen traded at 100.170, slightly off aneight-week high of 99.55 yen hit on Tuesday.
(Reporting by Vikram Subhedar, Editing by Jeremy Gaunt andAdrian Croft)
