Forex Today: Dollar dives, decoupling from stumbling stocks ahead of Trump's Chinese announcement

Here is what you need to know on Friday, May 29:

The US dollar remains on the back foot, with EUR/USD topping 1.11, despite a worsening market mood related to Sno-American relations. President Donald Trump will announce actions against China following Beijing's tightening of its grip on Hong Kong. The calendar is packed with events on the last day of May.

Sino-American tensions: China approved its new security law, limiting HK's autonomy. While the financial hub's importance in the Chinese economy is diminished in comparison to the past, the clash joins additional grievances between the world's largest economies, which include Huawei, human-rights in Xinjiang, and more. Beijing's aim for a "peaceful reunification with Taiwan" is also causing shivers down investors' spines. 

Trump may announce moves ranging from sanctions on several Chinese individuals, removing Hong Kong's preferential tariff status, or additional steps. He will likely speak late in the day. Both Democrats and Republicans are both opposed to China's policies ahead of the elections. 

Markets have been only occasionally paying attention to these developments and finding solace in the commitment by both the US and China to uphold the trade deal. Stocks may return to positive territory. 

US data published on Thursday has been mixed, with a downgrade of first-quarter Gross Domestic Product to -5%, a tumble in Durable Goods Orders, and another multi-million increase in initial jobless claims. However, the first drop in continuing claims is encouraging.

Friday's agenda including several indicators for April, including personal income, personal spending, and other figures. 

Core PCE, Personal Spending and Income Preview: The fall of records, where the wage earner leads, the consumer is sure to follow

Jerome Powell, Chairman of the Federal Reserve, will speak late in the American session, yet may have limited room to move markets after several public appearances in past weeks. 

Eurozone stimulus: Chancellor Angela Merkel is set to deploy an additional €100 billion to Europe's largest economy. The reports come on top of the European Commission's plan to raise €500 in common eurozone debt to be handed out in form of grants. Brussels' plan is backed by the largest countries but the "Frugal Four" has reservations. Nevertheless, that is the main factor boosting the common currency. Inflation figures are due out on Friday:

Eurozone Inflation Preview: EUR/USD has the wind in its back, and only a dual dip could down it

UK: Lloyds' business confidence survey for May dropped to -33, the worst since 2008. The economy is gradually reopening, including the return fo the Premier League. However, the pound lags some of its peers in coronavirus statistics and the pound is rising, but not like the euro. 

Canada is expected to report a fall of around 10% annualized in first-quarter Gross Domestic Product, worse than the US but better than the eurozone. USD/CAD has been trading lower amid the risk-on mood.

Canadian GDP Preview: Single-digit contraction could send CAD higher, three scenarios

Gold prices have stabilized around $1,720, above the lows but below the multi-year highs. WTI oil is on the back foot, edging lower alongside stocks.

Cryptocurrencies jumped on Thursday, with Bitcoin hitting $9,500. Cardano also stands out with a surge from the lows. 

The last day of the week and the month could see last-minute portfolio adjustment, perhaps triggering choppy trading. 

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