"There's a lot of stuff that people are watching," said William Hamlyn, an investment analyst at Manulife Asset Management, noting that UK investors will "mainly focus" on the snap election.
Despite worries over whether the ruling Conservatives will secure a fresh majority, the pound pushed over $1.2960. But that didn't help the main FTSE 100 stock index, which includes many firms that a strong pound crimps profits, and closed down 0.6 percent.
Frankfurt shares gave up 0.1 percent and Paris slipped 0.07 percent.
Wall Street stocks were flat nearing midday.
Thursday also sees what could potentially be the biggest market-mover -- sacked FBI boss James Comey's testimony on President Donald Trump's suspected campaign links to Russia.
While the European Central Bank isn't expected to raise interest rates at its policy meeting on Thursday, it could signal that its easy-money policy is closer to an end given stronger growth.
Meanwhile speculation Wednesday that the ECB could lower its long-term inflation outlook -- dangerously low inflation was the reason the ECB embarked on its easy-money policies -- led to a brief plunge in the euro.
- Conservative victory? -
Opinion polls predict a win for Conservative Prime Minister Theresa May, but main opposition Labour leader Jeremy Corbyn has gained ground in recent weeks.
Financial markets expect May to triumph, even though the Conservatives' polling lead has narrowed since the start of the campaign.
"I think the markets are definitely pricing in a Conservative win," Hamlyn told AFP.
"If you looked at the polls, you would basically say that markets are being incredibly complacent about the outcome.
"They are certainly not pricing in the odds of a Labour election victory. The polls are split between those that think there is going to be a big Conservative majority, and those that think it is too close to call."
He noted that there was a growing mistrust of opinion polls after they failed to forecast the Brexit referendum last year, the Conservatives' solid victory in May 2015, and Trump's presidential election win last November.
- Nerves over Comey -
"There seems to be a little bit of nervousness in the market over Comey's testimony," added Greg McKenna, chief market strategist at AxiTrader.
"Whether it is geopolitics and the Middle East, worries about James Comey's testimony, the ECB or UK election, traders backed off a little."
There are fears the dispute could turn into a wider conflict involving Qatar's ally Iran, with Trump wading into the row in a series of tweets signalling support for Riyadh on the issue.
However oil prices plunged after the US Energy Information Administration said inventories rose by 3.3 million barrels last week, while analysts had expected a decline.
"The oil market has been in decline since the OPEC announcement last month, and now that US stockpiles are rising, we may see a continuation of the decline," said market analyst David Madden at CMC Markets.