The dollar started the day off with general weakness after the U.S. and China came to a trade truce over the weekend. However, the risk-on mood faded away Monday morning as Brexit and other realities set in.

Dollar dips on tariff pause

President Trump and members of his administration met with Chinese President Xi Jinping and other officials Saturday evening on the sidelines of the G20 Summit in Argentina, striking a deal to deescalate the current trade war.

The U.S. will hold off on its plan to raise a 10% tariff on $200 billion in Chinese goods to 25% on Jan. 1, and China will make significant purchases in U.S. agricultural, energy, industrial and other goods. The details of the deal are not exactly crystal clear and some are saying it’s just another kick-the-can moment in current global trade relations.

However, the truce did create optimism in the markets and a risk-on mood that helped emerging markets and hurt the dollar.

EUR/USD climbed up to 1.137 Monday morning before falling back to 1.132. GBP/USD jumped to 1.282 and then fell to 1.272 on Brexit uncertainty.

The dollar recovered as many skeptical investors and market watchers debated the optics of the event versus the actual substance of a deal.

President Trump did offer one specific measure on Twitter last night, saying China “agreed to reduce and remove tariffs on cars coming into China from the U.S.”

That caused the euro and the pound’s decline against the dollar to hesitate a bit.

Theresa May threatened with no confidence vote

Theresa May is once again facing threats to end her term as U.K. Prime Minister if the Brexit deal doesn’t go through.

The Labour party has said that it will call for a no confidence vote to take down her government if the Brexit deal with the E.U. is not passed through parliament.

Lawmakers will begin looking at the deal this week, with a vote set for Dec. 11. Unfortunately for May, many of her own party have said they will reject the deal.

If she loses the threatened confidence vote, we could see a general election in the U.K.

GBP/USD is at its lowest levels since the end of October, hovering around 1.271.

PMI data shows stronger manufacturing

The beginning of the month brings the Markit manufacturing purchase manager’s index for November.

Across the Eurozone, the manufacturing PMI showed continued growth and strong business conditions. The German PMI hit 51.8 instead of the 51.6 expected and the Eurozone PMI also hit 51.8, better than the 51.5 expected.

U.K. numbers also outperformed expectations of 51.8, coming out at 53.1. Italy’s numbers were down at 48.6, missing the 48.8 estimated.

The U.S. numbers are due later this morning.