As the trade war between the U.S. and China intensified this weekend, global stocks retreated and the U.S. dollar remained relatively steady with U.S. Treasuries rising. Meanwhile, leaders of the U.K. and Germany are facing political pressures this morning. Monday is light for economic data, so a series of central bank speeches and political sentiment will likely move the pairs.

Greenback gains as trade war intensifies

The Trump Administration followed through on its promise to impose tariffs on $50 billion worth of Chinese goods, throwing the first punch Friday between the two countries.

The White House said it would impose a 25% tariff on $34 billion worth of goods by July 6 with $16 in imports under review. China struck back immediately with a 25% tariff on $34 billion of U.S. agricultural goods and autos starting on July 6.

The dollar is holding strong against the euro, pound and Japanese yen after a weekend of tit-for-tat tariffs. The common currency and the pound have their own political pressures weighing them down.

On Thursday, the euro took a nose-dive after the Central Bank announced it likely wouldn’t raise interest rates until summer 2019. The EUR/USD pair traded as low as 1.155 by the end of Thursday. The pair hovered nearby over the weekend and trades around 1.161 Monday morning.

The USD/JPY pair is trading around 110.5 after climbing up from 110.3 earlier Monday.

Fedspeak, Sintra conference eyed

The data-light Monday means that more eyes will be on a series of speeches from the central banks today.

The European Central Bank hosts a forum on central banking in Sintra, Portugal this week. ECB President Mario Draghi will give the opening remarks around 1:30 p.m. EST today. He’s also set to deliver a full speech Tuesday.

The Federal Reserve Bank of New York is hosting a forum on banking culture as leadership changes take place. Current President William Dudley is speaking this morning and will hand over the reins to John Williams. Williams was president of the Federal Reserve Bank of San Francisco and was appointed to the New York Fed position back in April. His official first day is today. Williams will speak later this afternoon at the same conference.

Theresa May under pressure

U.K. Prime Minister Theresa May is under pressure this morning to explain how she will finance an additional £384 million in funding for the National Health System.

The pound is weakening Monday morning off that and Brexit uncertainty. The E.U. withdrawal bill is back in the House of Commons this week. We see any attempts to soften the bill and Brexit as pound positive in the short term.

GBP/USD is around 1.323 after trading around 1.328 earlier Monday. Cable tried to push through 1.33 over the weekend.

Coming up on Thursday, the Bank of England will deliver its interest rate decision, which will probably be to hold rates at the current 0.5% due to slower inflation and economic growth.

Immigration concerns in Germany simmer

Angela Merkel was under the gun this morning after a coalition political party made some demands for immigration policy reform, putting her Chancellorship at stake.

The Christian Social Party said that Merkel had two weeks to address the country’s asylum system. Merkel has since accepted the deadline, removing the immediate uncertainty and allowing the euro a slight reprieve.

EUR/USD has climber up from 1.157 to 1.161 in the past few hours.

Merkel has to strike a deal with other E.U. governments by the end of June. The E.U. summit is on June 28-29.