* No surpises expected in Fed minutes
* Dollar near lowest level of the year vs currency basket
* Oil rises, but gold and copper prices flat on the day
By Ryan Vlastelica
NEW YORK, Feb 19 Stock markets around the world mostly dipped on Wednesday as investors held off from making big bets ahead of the release of minutes from the U.S. Federal Reserve's latest meeting, though the minutes were not expected to deliver any policy surprises.
The dollar hovered near its lowest level of 2014, while both the euro and the yen were little changed on the day. Gold prices were also near breakeven levels.
At 2 p.m. (1900 GMT), the Fed will release minutes of its January policy meeting, when it decided to trim its monthly asset buying by $10 billion, the second straight month that it decided to reduce its bond purchases by $10 billion.
Fed Chair Janet Yellen earlier this month indicated that the central bank was inclined to keep tapering its bond purchases, though markets assume a recent run of soft economic data will encourage the Fed to be cautious.
Recent U.S. data, including on the housing and labor markets, has come in below forecasts, though many analysts chalk the weakness up to severe weather and don't expect the Fed to adjust the slowing of its stimulus program as a result.
If the central bank were to slow the pace of tapering, it could raise concerns that the economy is too weak to grow without outside assistance.
"I don't think the market is going to be surprised, but there is always caution ahead of these minutes. I think the one thing to look for is the collaboration between Bernanke and Yellen since this was Bernanke's last meeting," said Randy Frederick, managing director at Charles Schwab, in Austin, Texas.
Ben Bernanke stepped down as Fed chairman on Jan. 31, two days after the close of the Fed's last policy meeting.
The Dow Jones industrial average was down 34.61 points, or 0.21 percent, at 16,095.79. The Standard & Poor's 500 Index was down 4.46 points, or 0.24 percent, at 1,836.30. The Nasdaq Composite Index was down 19.65 points, or 0.46 percent, at 4,253.14.
European shares rose 0.1 percent while the MSCI World index lost 0.1 percent.
The benchmark 10-year U.S. Treasury note was up 3/32 in price, with the yield at 2.6979 percent.
The U.S. dollar index, which measures the dollar against a basket of major currencies, rose 0.1 percent, after hitting its lowest level in 2014 to date overnight. Both the euro and yen were little changed against the dollar.
"We've had nothing but negative economic surprises and the excuse that it is all weather-related is going to terminate very soon," said Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management in New York. "If this reflects a more secular weakness, the Fed could take a more dovish bent in the near term," he said.
Nevertheless, most strategists expect the Fed to keep tapering, barring a major economic shock, although some think quantitative easing could continue into next year.
"Our economists expect today's FOMC minutes to ... (say) that the tapering process remains on track and is unlikely to be interrupted barring a significant shock to the economic outlook," said Adam Cole, head of G10 FX strategy at RBC Capital, in a note. "In other words, a $10 billion reduction per meeting should be everyone's base case."
Dealers have been surprised by the euro's resilience given speculation the European Central Bank will have to ease policy further to avert the risk of deflation.
"One could expect that if the real economy is getting up and if we see that in Germany wage increases are quite substantial, there might be a certain self-correcting trend" in inflation, ECB member Ewald Nowotny told Reuters in an interview. "So we will see whether this needs some specific action or whether ... there would be a merit for waiting."
The emerging markets focus remained on rising unrest in both Ukraine and Thailand. Ukraine's sovereign bonds and currency both tumbled as a renewed wave of violence hit the capital Kiev, adding pressure on Russia's ruble, which has hit an all-time low against the euro.
The ruble's weakness stemmed mainly from the Finance Ministry's plan to buy foreign currency to replenish one of its sovereign wealth funds. Moscow shares also fell sharply.
In Asia, Japan's Nikkei ended off 0.5 percent, following Tuesday's 3 percent rally after the Bank of Japan decided to expand a scheme to encourage more bank lending.
Dealers also kept a careful eye on China's central bank after it drained funds from the money market on Tuesday, though it took no new action on Wednesday, helping the Shanghai market bounce 1.1 percent.
The People's Bank of China is trying to engineer a gradual upward shift in the cost of money to encourage companies to deleverage and discourage high-risk shadow banking activity, though investors are anxious it could hurt growth.
In commodity markets, both gold and copper prices were slightly lower on the day. Brent crude was flat while U.S. crude futures rose 0.4 percent on forecasts of lower crude and oil products stockpiles due to new pipeline capacity and robust winter demand.