Europe's main equity markets retreated further Wednesday before the release of crucial minutes from the US central bank's July meeting, dealers said.
Asian stocks traded mixed, with investors anxious that the US Federal Reserve could soon begin to unwind its vast quantitative easing (QE) stimulus policy.
In late morning deals, London's FTSE 100 index of leading shares dropped 0.72 percent to stand at 6,407.11 points.
Frankfurt's DAX 30 dipped 0.20 percent to 8,283.35 points, while the CAC 40 in Paris nudged 0.02 percent lower to 4,028.29 compared with Tuesday's closing values.
European shares had already fallen on Monday and Tuesday, as US stimulus scale-back speculation intensified.
"Investors are very much anticipating the next round of QE newsflow and probably won't do a great deal until any new information becomes known," said Spreadex trader David White.
"The risk for investors is indeed that the Fed delivers tapering at a pace faster than predicted. Any such process will likely upset the equity market and send treasuries into a spin."
With the US economy showing signs of improvement, analysts say the Fed will likely slow its bond-buying programme.
"Has the US economy recovered enough? This seems to be the most important question at the moment," added trader Anita Paluch at Gekko Markets.
"Any clues for an exit strategy of the $85-billion-a-month purchases are going to be carefully distilled and this is what is going to drive sentiment today across Europe."
Analysts will therefore read the Federal Open Market Committee (FOMC) minutes very closely.
Expectations of tapering have seen foreign investors in recent months repatriate some of the vast sums that poured into emerging economies when QE was unveiled in September 2012, in turn hitting currencies and equities.
In foreign exchange deals, the European single currency dipped to $1.3392 compared with $1.3417 late in New York on Tuesday, when it had touched a five-month high at $1.3452.
The dollar climbed to 97.45 yen from 97.26 yen.
Sterling rallied to 85.43 pence to the euro and steadied at $1.5675 having reached a two-month high point of $1.5696 on Tuesday.
Currencies in developing Asia meanwhile struggled, as concerns grow that the Federal will soon begin to unwind its massive stimulus policy, in a move which would divert cash back to the West.
Many investors are anxious to see if higher US interest rates are in the offing, which would lessen the appeal of emerging markets.
The Indian rupee attempted to recover but Indonesia's rupiah and the Thai baht faced more selling pressure.
"Any respite for the Indian currency has been brief at best," said Kathleen Brooks, research director at trading site Forex.com.
She added: "Tonight's minutes are critical, any mention of the timing or composition of tapering could be considered hawkish, and thus dollar positive, which may exacerbate the decline in emerging markets foreign exchange in the coming days,"
On the London Bullion Market, the price of gold decreased to $1,362.25 an ounce from $1,372.50 on Tuesday.
Market sentiment was also hit this week after German finance minister Wolfgang Schaeuble said that crisis-hit Greece will need another rescue package after 2014.
"There will have to be another programme for Greece," Schaeuble said at an election campaign event near the northern city of Hamburg on Tuesday, according to media reports.