US President Donald Trump is likely to announce the new levies as early as Monday, according to Reuters. The tariff level would probably be about 10% according to Wall Street Journal, which is below the 25% the administration had said it was considering.

The WSJ also reported that China may decline to attend trade talks due next week as Beijing will not negotiate under threat.

“Further escalation looks very likely in which the rate will likely be raised to 25% and more US tariffs threatened, while China may potentially pull out of trade talks entirely and escalate on the new front of outright export restrictions,” JPMorgan analysts stated in a morning note.

“This would of course only inflame the situation further.” The note added further.

The dollar index DXY held at 94.965 against a basket of major currencies, well above Friday’s 94.359 which was the lowest since end-July. The dollar JPY= was last at 111.99 yen, withing kissing distance of Friday’s 112.16 which was the highest since mid-July. It gained 0.9% last week.

The currency has seen a surge in safe-haven demand from as escalation of global trade tensions that involve the United States, China, Canada and European Union. Expectations of faster US rate rises have also pulled the currency higher.

Investors continue to be bullish on the greenback with net long positions of $19.2 bn, according to calculations by Reuters and Commodity Futures Trading Commission (CFTC) data released on Friday.