The combination of a broadly weak US dollar and the Bank of England’s decision to leave rates unchanged at 5.25 percent on March 6 allowed the GBP/USD pair to hit a more than two-month high of 2.0215 on Friday.

Negative NFP data would lend support to the view that current economic weakness is slowly making its way from Wall St. to Main St. via the labor market as the US consumer makes up 70 percent of the economy.

Trichet’s bias has assured many that the central bank isn’t even considering reducing rates in the near-term. If the ECB maintains this stance this week, EUR/USD could surge above the record high of 1.53.

With US data reflecting eroding economic conditions and the financial markets still in turmoil, futures are increasingly pricing in a 75bp cut on March 18.

The Royal Bank of Canada is expected to ease rates by 25 points from 4.00%, although expectations are increasing that a 50 point cut may be in store, as a U.S. downturn is weighing on the Canadian economy.

Upcoming, ISM Manufacturing may give an insight into the direction of the U.S. economy as its prices paid and employment components are leading indicators for future CPI data and Nonfarm payrolls.

The upcoming personal spending and income numbers may confirm concerns of the Fed, which still sees considerable downside risks to the U.S economy and signaled that future rate cuts are forthcoming.

With the US dollar plunging to record lows against the Euro, it is very clear that bearish sentiment on the US economy is winning out in the markets.

The dour sentiment on the US economy will not receive much of a boost on Wednesday, as durable goods orders for the month of January are expected to plunge 4.0 percent.

On Tuesday, the release of US economic data will likely highlight some of the reasons why traders are ramping up speculation that the country is in midst of a recession.