Chinese stocks slipped on Thursday and the yuan gave back some of its recent gains against the dollar a day before China and the United States were due to set punitive tariffs on each other’s goods, heightening fears of a global trade war. The declines in the yuan and stocks come the same day the central bank’s targeted cut of reserve requirements for banks took effect, which is expected to release additional liquidity in the financial system. Major currencies were on tenterhooks on Thursday on the eve of Washington’s deadline to impose tariffs on Chinese imports while the yuan held steady after the central bank this week sought to stem its recent tumble.

In currencies, the EUR/USD lies steady 1.1660, having found firm support near 1.1600 despite worries about an economic slowdown and political instability in Europe. GBPUSD held firm at 1.3230 showing Britain’s dominant services industry gained momentum last month fuelled expectations of a Bank of England interest rate rise this summer.

In commodities, Gold prices held steady at 1255 as traders awaited minutes from the U.S. Federal Reserve’s policy meeting later in the day. Oil prices are trading lower since the trade war cast a shadow over markets, with China warning it could introduce duties on U.S. crude imports at a yet unspecified date. U.S. President Donald Trump sent a strident tweet demanding that OPEC cut prices for crude.

For today main economic events to focus on, includes BOE Gov Carney Speech, US ADP Non-Farm Employment Change & ISM Non-Manufacturing PMI, Crude Oil Inventories, FOMC Meeting Minutes. Moderate to high volatility is expected in the forex market for GBP and US dollar pairs.