The dollar is slipping across the board this morning ahead of the Federal Reserve interest rate decision Wednesday. Meanwhile, China is digging its heels in on trade.

Dollar weakness persists

The dollar is giving up gains from Monday against the euro and the pound, despite the 10-year Treasury yield hovering around 3.1%.

EUR/USD is holding under the 1.180 mark around 1.178. the pair dipped as low as 1.173 earlier Tuesday.

The GBP/USD is also hovering in a range around 1.314. The pair hit as low as 1.309 Tuesday. The pound is held back by Brexit uncertainty.

The U.K. Labour party is expected to make a decision this week on whether it will support a second referendum vote.

China isn’t giving in soon

The Chinese government doubled down on its promise not to proceed with trade talks as long as there are threats from President Trump for future tariffs.

Wang Shouwen, China’s vice commerce minister, said that deciding when to resume talks is up to the U.S.

Meanwhile, both countries are looking into alternative economic paths forward if the disagreement continues.

China said it will boost domestic consumption and business investment and a U.S. official told farmers they should diversify away from China.

Eyes on the Fed

Investors and the markets are holding their breath for the Federal Reserve interest rate decision due tomorrow.

It’s widely expected that the Fed will raise rates to 2.25% from 2%. The Fed is also expected to release an updated dot plot – projections of future rate hikes. Investors are estimating a hike once a quarter until June 2019.

The decision is due at 2 p.m. Wednesday.