Talking Points:

• British Pound may fall further if soft wages growth undercuts BOE policy bets
• US Dollar may face selling pressure on minutes from January FOMC meeting
• Aussie Dollar drops, Yen and Euro gain amid risk aversion in overnight trade

UK labor-market data headlines the economic calendar in European trading hours. Jobless claims are seen falling 3k in January, marking the third consecutive decline. Traders are likely to be far more interested in wage growth figures after a disappointing CPI report undermined BOE policy bets yesterday, sending theBritish Pound lower. Average weekly earnings are expected to grow at an annual pace of 1.9 percent, the lowest since February 2015. A soft print may push rate hike calls farther still into the future, compounding selling pressure on the UK unit.

Later in the day, the spotlight turns to the release of minutes from January’s FOMC meeting. Investors will be keen to gauge whether the document suggests that market volatility since the beginning of the year has undermined policymakers’ projected rate hike path. The policy statement and subsequent comments from Fed officials including Chair Yellen have taken a deliberative posture. A similarly vague tone this time around may give traders pining for dovish reassurance enough fodder to renew US Dollar selling and offer a lift to risky assets.

The sentiment-linked Australian Dollar underperformed while the anti-risk Euro and Japanese Yen traded higher in overnight trade as jitters returned across Asian stock exchanges. The MSCI Asia Pacific regional equities benchmark fell over 1 percent. The bulk of the move came after the Chinese Yuan was weakened by 0.16 percent – the most since January 7 – at today’s official fixing. Outsized USD/CNY devaluation has been a potent trigger for risk aversion since the beginning of the year.

Losing money trading in the FX market? This might be why.

Asia Session

European Session

Critical Levels