Due to short squeeze in risky assets, the US Dollar could see downside risks against high beta currencies. The risky assets are seen supported by markets expectations that are inclined towards ECB's accommodative monetary policy stance in the short term. Hence, commodity and EM currencies as well as risky assets are likely to find some support, as downward pressure weighs on EUR.

Amid global turmoil, markets do not expect a rate hike in Wednesdays FOMC meet, however, March meet will be closely watched. Fed fund futures suggest chances of 25% hike in the March meeting.

The employment cost index is scheduled for Friday, however, it is considered to be a low frequency indicator as its lags correlation among the set of wage indicators. The market expectations suggest a 0.6% increase q/q for the 4Q (previous 0.6%).

"Regarding the FOMC meeting (Wednesday), we do not expect material changes in the statement and we think it will probably show a cautious stand due to the recent spike in volatility in the financial marketplace." - Barclays