The dollar is gaining Tuesday morning off reports that the U.S. and China will restart talks to end the trade war between the two countries. The Bank of Japan kept policy largely unchanged, pledging to keep monetary policy loose and maintain low interest rates.

Trade talks on the table

According to reports Tuesday morning, officials from the U.S. and China are meeting in an attempt to avoid further escalation of the growing trade war between the two countries.

The renewed hope comes after trade talks between two of the world’s largest economies have stalled for the past two weeks. Representatives of Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are looking to restart negotiations.

The dollar is gaining across the board on the news, pushing the EUR/USD and GBP/USD lower and the USD/JPY pair higher.

EUR/USD is trading down to 1.170 after reaching as high as 1.174 earlier Tuesday morning. Eurozone Q2 GDP slightly missed expectations, but the pair is driven more by the trade talks then the data.

GBP/USD was climbing higher earlier in the day in anticipation of the Bank of England’s monetary announcement Thursday. The pair hit 1.316 before getting knocked down from reports of renewed trade talks. Cable is down around 1.311.

The dollar is able to gain the most against the Japanese yen. USD/JPY is pushing up against 112.0 after starting the day closer to 111.0. The JPY weakness is also due to the Bank of Japan’s recent monetary policy meeting

BoJ keeps ultra-loose monetary policy

During its monetary policy meeting Tuesday, the Bank of Japan kept policy unchanged and committed to “continuous powerful monetary easing.”

BoJ Governor Haruhiko Kuroda went against market speculation that he would make broader changes, and pledged to keep interest rates low for “an extended period of time.”

USD/JPY has increased 100 pips this morning from 110.9 to 111.9 on the news. The pair was boosted by the U.S.-China trade talks report as well.

More monetary meetings on the way

The focus on trade and monetary policy has the markets largely ignoring data points like the U.S. core personal consumption expenditures that came out this morning slightly under expectations.

That trend will likely continue as the U.S. and U.K. central banks hold press conferences over the next two days. Although it’s expected to hold rates steady, the Federal Reserve’s policy announcement Wednesday will be highly scrutinized. On Thursday, the Bank of England is expected to raise rates for the first time since November despite an economy that shows signs of strength when comparing Q2 to Q1, but isn’t particularly strong.