The US dollar fell against all the major currencies last week, and the technical indicators warn the further losses are likely.  Market speculation that the Federal Reserve will be forced to cut rates more than once this year has strengthened.  It is outpacing the expectations that the ECB and BOJ will have to ease policy as well.  Canada’s firmer data, including a surge in job creation, and Norway’s shift to a less accommodative monetary stance, are notable exceptions.  The Bank of England may be as well, but the uncertainty about Brexit and the risk of a no-deal exit at the end of October suggest steady policy may continue to be appropriate.

President Trump hinted that the new tariffs on Mexico would not be implemented while the markets were open before the weekend.  The peso rallied on the news, and the deal that led to the “indefinite suspension” of the tariff was confirmed.  To be sure, the “suspension” means the tariffs and the claim of emergency powers remains on the books, and that the proverbial Sword of Damocles continues to be an implicit threat whose suspension can be lifted at the will or whim of the US President.