LONDON, July 10 ― European shares dipped in early trading today ahead of US Federal Reserve Chair Jerome Powell's two-day testimony where investors will closely watch for signs of an interest-rate cut later this month.

Powell is scheduled to give his semi-annual monetary policy testimony to Congress at 1400 GMT, and investors see a worrying lack of inflation globally as one reason for Powell to sound suitably dovish.

The pan-European shares index fell 0.2 per cent and was on course to extend losses to a fourth day, with Spain's IBEX underperforming with a 0.4 per cent loss.

Stocks with exposure to Mexico led losses in Madrid with BBVA, Iberdrola and Telefonica down between 0.6 per cent and 0.8 per cent, after a shock resignation of Mexican Finance Minister Carlos Urzua yesterday rattled Mexican markets. ― Reuters