US-China tensions continue to ease

Yesterday's currency recap

Renewed optimism in markets lifted stocks as traders continued to weigh up the mixed signals regarding tariffs. In the morning, the message from the White House was that China will receive new rates in 2 to 3 weeks. However, later China stated no talks had taken place between the two countries.

Fed members Hammack and Waller commented that if tariffs cause job losses they would support a rate cut in June. This caused treasuries to pick up, driving yields lower, and rendering USD marginally weaker.

Read more about the Fed's interest rate decisions here - When is the next Fed interest rate decision?

Today's GBP rates

What we think

The mood this morning continues to be buoyant after reports that China is considering suspending its 125% tariffs on some US imports, as well as reports that the US could be close to a deal with Norway and South Korea. The dollar is attempting to hold on to yesterday's gains as traders continue to digest the ongoing tariff headlines.

This morning, UK retail sales came in better than expected but with minimal impact on the pound.

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