FX Closing Comments

The Dollar remained firm for the 7th straight day on the back of inflation fears, which imply more rate support by the Fed. It was the rise in core PPI (.3% for May) that gave Dollar bulls increased confidence that one, if not two or more, rate rises were in the cards for the Dollar. A big sell-off in metals was also helpful, as fund assets moved into Dollar-denominated assets. The big number for tomorrow will be the core CPI, which is estimated to have rose to .2% in May. A figure higher than .2% has the potential to spark a Dollar rally, as rate expectations continue to take shape.