The global risk sentiment took a sharp knock on Friday in reaction to the US President Donald Trump's latest move to slap tariffs on Mexico and reports that China may limit the rare earth exports to the US. Also, fuelling risk aversion, the Iran-Iraq tension wooed global investors towards safe-havens.

Despite a heavy-showing data-wise this Friday, the market is likely to be driven by the risk sentiment, in the wake of escalating fears over the US-led protectionism and its impact on global growth.

GBP/USD held on the defensive amid persistent UK political uncertainty and growing fears over a no-deal Brexit, though the lack of fresh negative headlines held investors from placing any fresh bearish bets. EUR/USD has been trading in a narrow range in recent hours, while USD/JPY targets 108.70 amid the escalating trade war.

A relatively busy final EUR calendar for this week, kicked off with the German Retail Sales and UK Nationwide House Prices data at 06:00 GMT. From the UK docket, the second-liner net lending to individuals, consumer credit and mortgage approvals data will drop in at 08:30 GMT. Ahead of the US open, the German Prelim CPI data will be released at 12:00 GMT that is likely to have a significant impact on the EUR markets.

In the NA session, at 12:30 GMT, we have a raft of economic news, including the US Core PCE price index and personal spending. Later in the session, the US UoM consumer sentiment index and Baker Hughes oil rigs count data will hog the limelight at 14:00 GMT and 17:00 GMT respectively.

Oil prices fell by more than 1% on Friday and were on track for their biggest monthly fall since November as trade conflicts spread and U.S. crude output returned to record levels. Gold prices rose on Friday amid news of unexpected tariffs on Mexican goods, while persisting Sino-U.S. trade tensions continued to attract safe-haven demand.