After a hiatus over the two holiday weeks, Brexit will return to be a focus this week as U.K. politicians return to Westminster. The dollar was down against its major peers Monday morning as market mood remains upbeat from Friday and as the U.S. and China resume talks.

Pound to move with Brexit debate

The pound is likely to fluctuate this week as U.K. lawmakers restart the debate over the country’s Brexit deal with the European Union.

After Prime Minister Theresa May called off a vote on the deal back in mid-December, there was calm around sterling over the break. We’ll probably see volatility return this week as the debate heats up before a vote next week.

The GBP/USD pair climbed up from 1.272 to 1.276 Monday as a risk-on mood permeates the market.

Dollar still trending down from Friday

The comments from Federal Reserve Chairman Jerome Powell on Friday are still weighing on the U.S. dollar.

Powell said the Fed will be patient and is in no hurry to raise interest rates. This comes after much criticism from President Trump in 2018 and after the Red revised its 2019 outlook to two rate hikes during its Dec. 19 monetary policy statement.

Powell also addressed Trump’s dissatisfaction saying he would not resign if asked.

The EUR/USD pair edged higher this morning to 1.145 from below 1.140. The common currency didn’t seem to be impacted by worse-than-expected German factory orders for November. We’ll see how the pair fairs later this week when the minutes from the Fed meeting are released on Wednesday and when Powell speaks on Thursday.

China trade talks resume

The risk-on mood is partly due to renewed talks between the U.S. and China this week.

U.S. officials, led by Deputy Trade Representative Jeffrey Gerrish, are in Beijing today meeting with Chinese officials for the first time since Dec. 1. Chinese Vice Premier Liu He unexpectedly showed up to the talks, which the markets are taking as a good sign.