Forex today experienced a typical caution trading amid plenty key events ahead, with most majors sticking to tight trading ranges amid a minor US Dollar bounce and negative Asian equities. The risk-off sentiment extended further, as markets weighed in escalating US-EU trade worries and Brexit uncertainty. Markets buckle up for a full Wednesday, with plenty of key event risks due on the cards that are likely to trigger huge volatility across the forex board in the day ahead.

The safe-haven Yen traded on the front foot, keeping the USD/JPY pair largely subdued ahead of the 111.00 handle. Among the European currencies, Pound bounced to 1.3070 levels, but lacked follow-through while the EUR/USD pair consolidates above mid-1.12s ahead of the key ECB monetary policy decision.

The immediate focus remains on the relevant macro news from the UK docket due at 08:30 GMT that include the monthly GDP figures, industrial production and trade balance. However, the main market mover for the Pound is likely to be the outcome from the European Council Summit on Brexit due later in mid-Europe. EU leaders are likely to decide the UK's destiny that is most likely seen as a longer extension until March 2020.

Also, in focus remains the ECB monetary policy decision due to be announced at 11:45 GMT, followed by Draghi’s speech at 12:30 GMT. While Draghi speaks, the US CPI report will also be closely eyed for fresh hints on the US interest rates outlook and ahead of the crucial FOMC March meeting minutes.

Besides these big events, the EIA crude stocks data will be watched for fresh direction on oil prices.

Oil prices inched up on Wednesday amid supply cuts by producer group OPEC and U.S. sanctions on oil exporters Iran and Venezuela but pressured by expectations that an economic slowdown could soon dent fuel consumption.

Gold is trading near two-week tops as the overnight slump in the US equity markets, triggered by fresh global trade tensions, underpinned demand for traditional safe-haven assets. Also, the prevalent US Dollar selling bias, aggravated by a sharp downswing in the US Treasury bond yields, provided an additional boost to the dollar-denominated commodity. The positive factors remained intact through the early European trading session on Wednesday, although signs of stability returning to the global financial markets turned out to be the only factor keeping a lid on any strong follow-through momentum.