The safe-haven yen held firm and riskier Asian currencies softened a little on Wednesday, as currency investors awaited the signing of the U.S.-China trade deal with trepidation.

The formal agreement is aimed at drawing a line underneath 18 months of tit-for-tat tariff hikes that have hurt global growth.

But hopes that it may herald warmer relations between the world’s top two economies were dented late Tuesday when U.S. Treasury Secretary Steven Mnuchin said that current tariffs on Chinese goods would stay, pending further talks.

That toppled China’s trade-sensitive yuan from a six-month peak and lifted the yen from a seven-month trough. But moves in morning trade were slight as markets wait to see the deal inked.

“The deal is priced in,” said National Australia Bank’s head of FX strategy, Ray Attrill. “I can’t see any reason why the yuan should continue to strengthen, given the limited amount of tariff rollbacks that are contained in this deal.”

The yuan is the currency most sensitive to Sino-U.S. trade relations, and it retreated 0.2% to 6.8990 in offshore trade CNH=.

The yen JPY= was nearly 0.1% firmer at 109.91. The euro EUR= was steady at $1.1129 and the Swiss franc CHF= held on to overnight gains to sit at 0.9672 per dollar.

The trade-exposed Australian and New Zealand dollars each eased by 0.1%, with the Aussie AUD=D3 last at $0.6895 and the kiwi NZD=D3 at $0.6606. Against a basket of currencies the U.S. dollar held at 97.372 .DXY.

U.S. President Donald Trump is slated to sign the trade agreement with Chinese Vice Premier Liu He at the White House at 1630 GMT.

Washington has agreed to suspend tariffs on $160 billion of some Chinese-made electronics, and to halve existing tariffs on $120 billion of other goods to 7.5%.

A source told Reuters that China has pledged to buy almost $80 billion of additional manufactured goods from the United States over the next two years under the deal, although some U.S. trade experts called that unrealistic.

Mnuchin said deal documents will be released on Wednesday.

Elsewhere the British pound GBP= trod water at $1.3023, ahead of inflation data due at 0930 GMT.

The consensus expectation is for core annual inflation to hold steady at 1.7%. However several recent hints at rate cuts from Bank of England policymakers have investors on edge that a miss on the downside may strengthen the case for monetary easing.

Money markets are now pricing in a 43% chance for a 25 basis point cut in rates at the end of this month. BOEWATCH

“If we saw core inflation coming in at say, 1.4%, then I think that would inflame the situation,” said Chris Weston, head of research at Melbourne brokerage Pepperstone.

He added that business surveys next week would be even more closely watched. “If they don’t show any kind of meaningful rebound, then you’re probably going to get a market that’s pricing in (the chance of a cut) at north of 50%.”

Source: Reuters