The dollar fell against all the major currencies last week, save the Japanese yen.  All five of the best performers (NOK 2.1%, NZD 1.6%, AUD 1.0%, GBP 1.0%, and CAD 0.9%) appeared to take out downtrend lines that were in place since around June 10.  What is striking about the dollar’s slump is that it took place as the Federal Reserve’s balance sheet was shrinking for the third consecutive week and the unsecured overnight rate in the eurozone fell to new record lows, often cited as dollar-supportive.

The same is true of the JP Morgan Emerging Market Currency Index.  It snapped a three-week downdraft with a 1.1% rally that lifted the benchmark above the downtrend line begun with a key reversal of June 10.  The greenback had been trending higher against the Mexican peso since then as well and last week’s 2.7% decline pushed it below the trendline.