The Canadian dollar and Mexican peso rebounded as leaders from the neighboring U.S. countries said they’d struck deals with President Donald Trump to delay tariffs for one month.

The loonie, as Canada’s currency is known, surged more than 1% late in the Monday session — reversing an earlier 1.7% slide — after Canadian Prime Minister Justin Trudeau said new U.S. tariffs would be paused 30 days after a call with the U.S. leader. The peso was was up 1.5% after Mexican President Claudia Sheinbaum earlier said the nation had struck a similar standstill accord. It had earlier weakened by 3% against the dollar.

“When it comes to Trump it’s hard for narratives to trade even for 24 hours before an unwind headline,” said Jordan Rochester, head of FICC strategy at Mizuho Bank Ltd.

The Bloomberg Dollar Spot Index was up just 0.2% after earlier soaring some 1.3% on tariff concerns. Both Canada and Mexico agreed they’d start addressing Trump’s concerns over the movement of fentanyl.“Developments today may make investors more comfortable with the idea that the risk of hefty, long-lasting tariffs is lower now than it looked at the weekend — and perhaps that a bit of a wobble in the stock market can sway the president’s thinking,” said Shaun Osborne, chief currency strategist at Scotiabank.

The prospects of a trade war, which materialized over the weekend on Trump’s announcements of levies on Mexico, Canada and China, had investors piling into bullish dollar positions, betting that the tariffs would fuel inflation and limit the room for the Federal Reserve to cut interest rates.

Fed Atlanta President Raphael Bostic said Monday he wants to wait “a while” before cutting interest rates again following last year’s reductions amid uncertainty over where the U.S. economy is headed in 2025.

Tariffs that reduce imports into the U.S. stand to reduce the flow of dollars overseas, which would likely bolster the currency. The dollar has surged roughly 4.6% since Trump won November’s election.

The loonie has tumbled more than 4% since Trump’s election in November as Canada increasingly came under threat of trade restrictions from the new administration.

This is “meaningful” respite for the Canadian currency, according to Deutsche Bank macro strategist Tim Baker. He said the loonie can stay around 1.44 per U.S. dollar until there is more clarity.

Speculative traders remain heavily short Canada’s currency by some $10.3 billion, according to the most recent data from the Commodity Futures Trading Commission — by far the most among the Group of 10.

In Mexico, Sheinbaum said she had reached several agreements with Trump, and that both countries will start working on trade and security.

“This very much plays into the broad market bias that favors viewing tariffs as a negotiating tactic rather than a serious threat,” said Nick Rees, head of macro research at Monex Europe Ltd. in London. “There was a deal to be done with Mexico, but for Canada this will be much harder.”

Shares for the $1.3 billion iShares MSCI Mexico ETF rose 2.5% to $50.2 per share on Monday afternoon in New York, bouncing back from a loss as large as 3.45%. Mexican dollar bonds outperformed peers and the nation’s five-year credit-default swap slipped about four basis points. The local stock market is closed for a holiday.

Panama, South Africa

Panama’s bonds jumped after the nation promised free passage for US warships through the Panama Canal and said it will withdraw from China’s signature lending program. The concessions came after Secretary of State Marco Rubio blasted the government during his visit on Sunday.

The South African rand whipsawed, briefly trimming declines as the appetite for riskier currencies improved. Still the currency was down versus the dollar and is likely to remain under pressure after Trump pledged to halt all future funding to the country because of a new land-expropriation law.

The offshore Chinese yuan also wiped out an earlier decline to be up slightly on the day against the dollar, even though Trump has so far made no mention of whether his 10% tariff on Chinese goods would be delayed.

“The risk is two fold, a cry wolf market that can eventually be bitten, and some underlying damage even if some truce is found, that the repeat of these episodes and the volatility entailed weighs on investment spirits, both in markets and real economy,” said Alejandro Cuadrado, global head of FX at BBVA in New York.

The back and forth on Trump’s policies will likely continue to fuel swings in risk assets. A JPMorgan Chase & Co. gauge of global foreign-exchange volatility jumped to 8.84%, the highest since Jan. 20.

“We don’t think the MXN reprieve will last,” said Aroop Chatterjee, a strategist at Wells Fargo in New York. “It’s a question of when, not if tariffs go up and markets remain severely underpriced for that outcome.”