A week of mixed US data (hotter inflation, softer retail sales) suggests that the Fed will remain patient for longer. 

Most investors do not share the privilege of patience, and in FX, popular short-Dollar positions have been frenetically revamped. This means that more short-term USD resilience (our base case) may not translate into big USD rallies.

Looking at today’s events, the US data calendar includes PPI inflation, housing starts, and the University of Michigan sentiment. Expect more USD sensitivity to incoming releases, especially PPI and U. Michigan prints, should they tell a different story than the CPI report. We expect, anyway, some Dollar consolidation in the coming days, still with some upside risks.