Markets seem to be confused by the Fed’s hawkish messaging and the failure to act yesterday and the USD continues to reflect that disconnect. The DXY is trading a little firmer on the session after closing lower yesterday but the index is well off the intraday high and prone to more softness in the short run as markets assess the policy outlook across the majors. 

US data reports today include Retail Sales (expected –0.2% MoM), Import Prices and weekly claims data. Soft data will weigh on the USD.