The USD is trading firmer on the session overall but movement is limited as markets bide time ahead of Wednesday’s US CPI data.

The broader trend higher in the USD remains intact but gains today reflect a consolidation of losses in the index from around the 105 area. 

There is little sign at this point that the USD rally which got underway at the end of June is peaking but the USD is perhaps susceptible to data disappointments in the near term and it is starting to look a bit ‘rich’ relative to yield differentials versus its major currency peers. That may make additional gains harder to come by without stronger fundamental motivation.