The US dollar is retreating against the Mexican peso and Canadian dollar after Reuters reported that the Trump administration plans to implement tariffs on both of its biggest trading partners on March 1—a month later than had been previously threatened. Markets see this timeline providing room for Mexican and Canadian leaders to satisfy the president’s demands on border controls, potentially avoiding extremely-negative outcomes for all three economies.

This news item should be taken with a Truth Social-sized grain of salt: the president has walked back several similar articles in recent weeks, indicating in each case that he does not intend to adopt a more measured approach.

In currency markets, implied volatility levels are likely to remain elevated for many months yet, and tail risk protection—hedges against unexpectedly-extreme swings—will remain valuable, even if a symbolic resolution is reached in the coming days.