The risk sentiment remained softer across the financial markets this Thursday on the back of looming US-China trade worries and mounting UK political and Brexit uncertainty. As per the latest reports, the US urged the South Korean companies to reject Huawei’s products.

Amid risk-aversion, the safe-haven Yen received a fresh lift at the expense of the higher-yielding assets as a result the USD/JPY pair initially dropped to 110.15 lows, however, dovish comments from the BOJ policymakers and contraction in the Japanese manufacturing PMI help the major to move upward.

EUR/USD is on the back foot near 1.1140 ahead of key macroeconomic data released in Europe, having created a bearish hammer candle on Wednesday. Caution due to European Union elections will likely limit the EUR's ability to cheer upbeat macro data.

GBP/USD broke its consolidative phase seen in the early session, resumed its recent bearish momentum as growing concerns over the UK PM May’s resignation are back in play and headed towards the 1.2600 mark.

The European calendar today kicked-off with the German final GDP release at 06:00 GMT, however the focus for today remains the Euro area flash manufacturing and services PMI reports, that started releasing from 07:15 GMT. Despite upbeat flash readings anticipated, markets may remain wary ahead of the European Union elections. At 08:00 GMT, the German IFO survey will be also published. Meanwhile, the UK docket remains data-empty, as the focus remains on the UK political developments, with the UK PM May likely to resign this Friday.

In the NA session, the US weekly jobless claims will drop in at 12:30 GMT, followed by the US Markit manufacturing and services PMI reports due at 13:45 GMT. Next of relevance is likely to be the US new home sales data slated for release at 14:00 GMT among other minority reports.

Oil prices dropped by around 1% on Thursday, extending falls from the previous session amid surging U.S. crude inventories and weak demand from refineries.

The traditional safe-haven gold failed to benefit from the risk-aversion, as a broadly firmer US dollar due to a “patient stance” highlighted by the recent FOMC minutes continued to pressure the yellow metal. However, the ongoing escalation in the US-China trade tensions have helped limit deeper losses.