FXstrreet.com (Barcelona) - European markets have opened Wednesday's session on a slight sell tone ahead of UK employment figures and another string of key earnings reports by US banks. In FX markets, the Euro is trading at multi-month lows.

Eurostoxx 50 and German DAX indexes dip 0.2%, and the French CAC Index declines 0.22%. In the UK, the FTSE Index dips 0.13% one hour after the opening.

European markets are following declines in Asia, with risk appetite dampened by news about Chinese banking regulator tightening the pace of credit growth this year. European investors remain focused on UK's unemployment data, and earnings reports by Morgan Stanley, Bank of America, Wells Fargo and Bank of New York Mellon.

Euro and Pound drop sharply

EUR/USD decline from last week's high at 1.4580, has extended during Asian session to to levels below 1.4200, to a fresh 5-week low, at 1.4165, as the Euro remains weighed by concerns about Greece's financial health.

GBP/USD rally from 1.5900 area on January 7 peaked on Tuesday's European session at 1.6460, and the pair has retreated, reaching session low at 1.6250 at European session opening.

USD/JPY recovery from 90.30 low on Tuesday has found resistance at 91.35, and the pair has pulled back on early european session to 90.80 area at the moment of writing.