Yesterday’s release of a 0.4% MoM rise in US CPI has seen two year US swap rates back edge back to the April highs and provided the USD with a modest lift. For dollar bulls this is nothing more than a very modest swing across recent ranges and the scope to remain frustrated by a dovish Fed or subdued US data remains large. What we would say, however, is that long dollar positions have been cut back dramatically since last November. Aggregate net dollar positions held against eight IMM FX contracts are now short dollars and yesterday’s release of the BoAML investor survey showed investors switching to the view that the USD is undervalued (from overvalued over the prior six months). Thus dollar just needs a catalyst. Dollar bulls have a love-hate relationship with the Fed and tonight get to see the minutes from the April 27th FOMC meeting, where the Fed seem to downgrade external headwinds. We’ve been here many times before, but with the probability of a June Fed hike priced at just 12% (July 27 hike priced 28%) we do tend to see upside risk to US rates and the USD from current levels. A DXY break of 95.20 is meaningful.