Today’s session started eventfully amid renewed fears over the US-China trade war, following the US President Trump’s overnight comments, as he threatened to place "major tariffs" on Chinese goods imported into the United States if his administration is unable to reach an effective trade deal with Beijing.

Moderate risk-aversion persisted across the financial markets in Asia that helped the US dollar to recover some ground across its main competitors. USD/JPY bounced-off two-week lows amid a broad-based US dollar rebound and BoJ Deputy Governor Wakatabe’s dovish remarks. EUR/USD remained under pressure and GBP/USD was down again, rattled by Brexit setbacks in parliament.

The European calendar is busy today with the ECB President Draghi’s speech at 08:30 GMT, being the main highlight. The non-monetary policy meeting of the ECB will be held at 08:00 GMT and the BOE FPC statement will be published at 08:30 GMT. Following, the services PMI releases at 08:55 from Germany, that could offer some incentives to the EUR, while the UK services PMI report due at 09:30 GMT could affect the Pound. Also, of note remains the Eurozone retail sales report that will drop in at 10:00 GMT.

In the NA session, major US markets will be closed in honour of former U.S. President George H.W. Bush, the former US President who passed away at the age of 94 on Dec 1st. At 19:00 GMT, the Fed Beige book will be released, which could offer some fresh insights on the Fed’s monetary policy path.

Oil prices fell on Wednesday, pulled down by swelling U.S. inventories and a plunge in global stock markets as China's government warned of increasing economic headwinds. Gold prices slipped on Wednesday as the dollar rebounded following a plunge on the Wall Street overnight. The plunge in U.S. stocks came after top White House economic adviser Larry Kudlow backtracked from U.S. president Donald Trump’s announcement that Beijing had agreed to reduce tariffs on U.S.-made cars.