Early on Monday, the US dollar is trading steady after strengthening to an over two-month high against the Japanese yen on improving market sentiment on the back of a possible progress towards resolving the US-China trade war. At the time of writing, USD/JPY is trading around 108.30.

After the high-level trade talks concluded on Friday, US President Donald Trump confirmed that the negotiations had resulted in what he termed a ‘Phase 1’ trade deal between the two nations. This initial trade agreement covers issues of agriculture, currency and touches some areas of IP protection as well.

Although analysts express caution that this partial trade deal announced appears to an interim truce in the trade war, it has the markets buoyed up and trading optimistically for now. For now, Trump has stated that it could take up to five weeks to get this agreement he announced in writing, and that while there is a real threat of it collapsing before that, he hoped that that does not happen.