Bernanke was to speak later in the day at a Fed conference in Jackon Hole, Wyoming.
Continue Reading Below
A year ago in the same place, he opened the door to a second round of quantitative easing. Although there was some belief that he would announce a third round of asset buying this year, he is not now expected to come up with a fresh dose of shock treatment for the ailing U.S. economy.
He is expected rather to acknowledge his disappointment over the pace of growth, possibly downgrade his outlook, and explain which medicines left in the Fed's cabinet are best suited to fortify the economy. [ID:nFEDAHEAD}
The uncertainty about what is to come has put many investors in a cautious frame of mind.
"With many traders feeling like we're standing on the edge looking down into a global recession, Bernanke has the ability to significantly elate or deflate the markets today," said Jonathan Sudaria, dealer at Capital Spreads.
World stocks as measured by MSCI were flat.
The pan-European FTSEurofirst 300 lost 0.9 percent, although an extension of a ban on short selling of financial shares and related derivatives was seen supporting hard-pressed banking stocks.
Earlier, Japan's Nikkei closed up 0.3 percent.
WAITING FOR BEN
The dollar eased as investors shuffled positions ahead of the Wyoming speech. Some traders expected the greenback to stage a short-term bounce if Bernanke does not signal further monetary stimulus.
The euro edged higher against the dollar while higher-yielding currencies such as the Australian and New Zealand dollars also advanced.
"If Bernanke signals he is likely to be less accommodative about providing liquidity, we could see the dollar recover and depending on how Wall Street reacts to that, we could see some flows into the greenback," said Roberto Mialich, FX strategist at Unicredit.
"On the other hand, if he signals that he is ready to act and provide more support, then the dollar will weaken. If he says he is ready to act but not right now, I don't think the markets will be too disappointed."
Core euro zone government bonds were flat.