While the Fed tried to execute a hawkish skip, the outcome should reinforce the dance data with the Dollar. With market pricing expecting a July hike, the burden is for good data to validate pricing. US data surprises, for their part, now sit in the 45th percentile of the past 6m range. The index has cooled off from the recent highs around the 80th percentile. In turn, that leaves the USD at a bigger risk of misses. 

We continue to think that inflation matters more than growth, showing that policymakers won’t actually pushback on growth if it accompanies further disinflation. That keeps us biased to fade USD rallies ahead of the July meeting unless we start to see a clear string of upside US data surprises.