Pushback on President Trump’s proposed tariffs and news out of the Korean peninsula this morning are lifting the global stock markets, while the U.S. dollar declines against most major currencies except the Japanese yen.

Korean talks overshadow tariff worries

After a South Korean delegation returned from a meeting with Kim Jong Un, South Korea said Tuesday that North Korea is willing to talk with the United States and halt nuclear tests in exchange for its assured safety.

The news of progress in talks pushed the EUR/USD pair higher, overshadowing the recent headlines about Italy’s uncertainty and a potential global trade war. EUR/USD was trading just above 1.24 before the U.S. market open.

Fears of a trade war were already easing this morning as pushback for President Trump’s proposed tariffs on steel and aluminum continued to mount. Most significantly, Republican House Speaker Paul Ryan urged the White House to cancel the tariff plan.

The European Union fought back with its own list of potential tariffs, targeting about $3.5 billion in U.S. goods such as motorcycles, jeans and bourbon. The Euro rallied in the early morning hours Tuesday on the news.

GBP/USD pair pushed through 1.39 on fresh dollar selling after the North Korea news, recovering its losses in the 1.37 range last week.

With little on the economic data front for the U.S., U.K. or E.U., speeches by New York Fed President William Dudley and Bank of England Chief Economist Andy Haldane are the central focus.

BoJ Governor has to clarify remarks

The dollar was able to gain against the Japanese yen on the news of potential North Korean denuclearization, with the pair spiking to 106.4 early Tuesday morning.

Lightened demand for the safe-haven yen sent the dollar higher. However, the pair steadied back lower around 106.0.

Bank of Japan Governor Haruhiko Kuroda had to clarify some of his comments last week about the bank ending its stimulus program in 2019 that sent the yen soaring. During a testimony in Japan’s parliament, Kuroda said that the bank might find itself thinking about exiting the stimulus in 2019, but not actually doing it that year.

The BoJ is set to deliver its monetary policy announcement and interest-rate decision on Friday.

USD/CAD makes a sharp U-turn

The USD/CAD pair pressured the 1.30 mark Tuesday morning and then made a sharp reversal, dipping to 1.286 on the North Korea news before steadying in the 1.29 range.

The dollar selloff seems to have slowed a bit and investors will look to the Canadian Ivey Purchasing Manager’s index coming out later this morning for more direction on the pair.

The Bank of Canada is also set to deliver its interest-rate decision Wednesday. It is expected BoC will hold the rate and focus its announcement on NAFTA and trade concerns instead.