European shares edge down as Bernanke speech looms

Risk assets have seen broad but modest falls all week ahead of Bernanke's address to the annual Jackson Hole meeting of central bankers as improving US economic data chipped away at a widely held view the Fed chief would signal an easier policy stance.

"We go into the Jackson Hole conference with the market adjusted to more reasonable expectations of what Ben Bernanke will deliver. We would even go as far as saying that traders could be expecting to be disappointed," said Chris Weston, trader at IG Markets.

MSCI's world equity index was down 0.15% at 320 points on Friday, having lost about 1.3% this week on signs global economic activity is gradually slowing even as the fragile US recovery gathered some strength.

The FTSE Eurofirst index of top European shares was down 0.2 % at 1,075.87 points, near levels not seen since early August.

The euro hovered near its week's low at USD 1.2510, while the dollar stood at 81.65 against a basket of currencies, virtually unchanged over the whole week.

German government bonds were steady despite a surprising report that Bundesbank chief Jens Weidmann considered resigning several times because of his opposition to a new bond-buying plan from the European Central Bank.

Traders are looking ahead to the European flash inflation estimate for August and July unemployment rates due later which are expected to show prices gaining about 2.5% and joblessness edging higher across the 17-nation currency bloc.