A sense of caution prevailed across the financial markets in Wednesday’s trading, as markets remained wary amid the latest tough stance adopted by the White House on China. The US President Trump said on Tuesday that he had no interest in moving ahead unless Beijing agrees again to four or five "major points" that Trump, however, did not specify. As a result, the demand for the safe-havens was lifted at the expense of the risk/ higher-yielding assets.

The Yen traded on the front foot alongside gold prices, keeping USD/JPY under pressure below the 100-day SMA at 108.65. Meanwhile, both EUR/USD and GBP/USD traded modestly flat amid a broadly subdued US dollar and negative Treasury yields.

There is nothing much of note, in terms of the economic news, from the Euroland today, therefore, all eyes will be on the speech by the European Central Bank President Draghi due at 08:15 GMT and the eventual impact on the Euro, especially after the US President Trump noted on Tuesday that ‘the Euro and other currencies are devalued against the US dollar’. Further, markets will also focus on the UK Parliament, the leadership race and Brexit developments amid a data-empty UK docket.

The NA session offers the much-awaited US Consumer Price Index (CPI) data for the month of May at 12:30 GMT, with the annualized core figures likely to stay unchanged while the headline numbers are expected to soften slightly. Among other releases, the US Energy Information Administration weekly crude stocks data will drop in at 14:30 GMT. At 15:00 GMT, ECB’s Coeure’s speech will also draw some attention. The US monthly Budget Statement will be published later at 18:00 GMT.

Traders will also remain at the mercy of any tweets from the Trump, concerning the US-China trade spat that could have a major impact on the risk sentiment.

Oil prices fell nearly 2% on Wednesday, weighed down by a weaker demand outlook and a rise in U.S. crude inventories despite growing expectations of ongoing OPEC-led supply cuts.

Gold caught some aggressive bids on Wednesday and built on the previous session's goodish rebound from over one-week lows. Fears of a further escalation in the US-China trade tensions provided a strong boost to the precious metal's relative safe-haven status and turned out to be one of the key factors behind a follow-through up-move. Traders now eye the release of the latest US inflation figures for a fresh impetus.