Forex today: not as much inflation in US hurts DXY

Forex today was dominated by a lack of evidence of rising inflation throughout Europea and the US, pressuring bond yields and flattening the curves further.

The US dollar remains subdued although with the DXY still holding the channel's base. Markets still bank on a June hike by an 85% chance although there is an increasing scepticism much further out enabling the euro to gain traction. 

US data :

• US Core PCE Price Index MM Apr 0.2% vs 0.1% RTS f/c, -0.1% prev
• US Consumer Confidence May 117.9 vs 119.8 RTS f/c, 119.4 prev
• US Consumption Adjusted MM Apr 0.4% vs 0.4% RTS f/c, 0.3% prev
• US Personal Income MM Apr 0.4% vs 0.4% RTS f/c, 0.2 prev
• US CaseShiller 20 YY 5.9% vs 5.7% RTS f/c, 5.9% prev
• US Dallas Fed Mfg Bus Index May 17.2, 16.8 prev

The euro was further underpinned by the sentiment that June could offer hawkish rhetoric in the ECB meeting, while for the same date, June 8th, the pound was a wobble over the UK elections. The pre-election polls are showing that the Conservatives may not be in for a landslide victory after all. Also, on the political front, Trump's communications aide stepped down over the presidential grapples over the Russian debacle. However, the US economic outlook got a lift today with the Atlanta Fed raising the US Q2 GDP growth view to 3.8% from 3.7% calculated on May 26. 

Closing prices:

• DXY:  97.276  -0.17% (97.224 - 97.776)
• CHF0.9746 - 0.32% (0.9737 - 0.9808)
• EUR: 1.1190 +0.22% (1.1110 - 1.1205)
• GBP:  1.2856 + 0.12% (1.2795 - 1.2888)
• Cross: 0.8704 +  0.11% (0.86557 - 0.87047)
• USD/JPY:  110.78  - 0.44% (110.67 - 111.32)
• EUR/JPY:  123.96  - 0.21%  (123.16 - 124.39)
• USDCAD: 1.3461 + 0.07% (1.3451 - 1.3506)
• AUD/USD: 0.7465 +0.34% ( 0.7416 - 0.7468)
• NZD/USD: 0.7095 +0.54% ( 0.7035 - 0.7102)
• Gold 1,262.89USD - 0.41% (1,259.48 - 1,270.60)

Day ahead in Asia

Key events from the US session: 

• US: Personal income increased $58.4 billion (0.4%) in April
• WTI tumbles to lows near $49.00, API eyed
• CME Group FedWatch June hike probably virtually unchanged post-US data
• US: consumer confidence starting to ebb - ING
• Fed's Brainard: Another U.S. rate hike likely appropriate soon