The euro weakened and European stocks fell slightly as investors digested news that talks on Greece's next tranche of aid have been adjourned until Monday.
Greece's ASE led the way down, and was 0.8% lower in the European morning.
It was hoped that an agreement on the next payment to Greece would be reached at a meeting of euro-zone finance ministers late Tuesday but differences between them and the International Monetary Fund resulted in any potential decision being pushed back.
The euro was under pressure against a basket of major currencies following the news, and was recently at $1.2788 from $1.2818 late Tuesday in New York.
"The euro has dropped after the failure of the Eurogroup to come to a final agreement on Greece, and although they will reconvene on Monday, there is now no guarantee that an agreement is reached then either, as there seems to be a fundamental rift between the IMF and the EU," wrote Lloyds Bank foreign exchange strategists in a note to clients.
"On the positive side, the problems this time are not with Greece itself—no one is asking them to do more—and this suggests that sooner or later Greece will get its money."
While Spanish and Italian government bond yields were little changed, traders were cautious ahead of an auction of 10-year German Bunds later in the session.
The dollar rose to a seven-month high against the yen on news of a larger-than-expected Japanese trade deficit for October and a promise by Japan's Liberal Democratic Party, considered the front-runner in the coming Dec. 16 general election, to fight deflation and the yen's rise.
Equity markets in Asia were firm for most of the session, but stumbled, after the Greek talks collapsed, to end mixed.
Looking ahead, data on the U.K. public finances are due, as are the minutes of the last meeting of the Bank of England's monetary policy committee.
"We are broadly in line with market expectations that the minutes will show an 8-1 vote in favor of no change in policy, with David Miles the expected dissenter," Lloyds Bank said.
Crude oil futures rose as hopes of a cease fire between Israel and Palestinians dimmed.
