While the Dollar is slightly offered today, we think investors may be reluctant to rebuild Dollar shorts until next week's double event risk of CPI/FOMC has been overcome.

In the meantime, FX volatility levels continue to sink and the high yielders – especially the EM high yielders – are in demand. It is no doubt a crowded trade, but there is still a lot to like about the Mexican Peso which offers 12.5% implied yields through the three-month forwards.

DXY should trade well within a 103.50-104.50 range today.