USD in control.

Following yesterday's 'hot' CPI, the USD has maintained its strength as it appears June will be too soon for the FED to cut rates. Today we have US PPI, where I suspect it will take a significantly low number to derail the dollar strength.

It will now be very interesting to see if other central banks cut before the FED. Yesterday's BOC decision passed by uneventfully as June still appears on the table for Canada's first cut. Today it's the turn of the ECB. Given last week's 'soft' inflation, any signs of dovishness could add the EUR to the 'to short list' (along with the JPY & CHF).

What happens if Ms Laggarde attempts to sound hawkish? A EUR CHF long 'relative trade' could be an option ( I have read EUR CHF will slowly make its way back to parity) but overall, given the US and Australia currently have the 'best fundamentals' my preference would be to stick with USD or AUD longs .

My current 'decision' is to wait for the ECB press conference.

Feel free to email any questions: johnelfedforexblog@gmail.com