Economists at ING analyze US Dollar outlook ahead of the all-important US Consumer Price Index (CPI) data due out on Tuesday,

Holding pattern ahead of tomorrow's May CPI release

Low levels of FX volatility will continue to favour carry trade strategies unless we see some major dislocation in the US rates market or some financial system stress re-appear. Against that backdrop, the Dollar should stay reasonably bid and its first major challenge this week will be tomorrow's May US CPI. 

DXY should trade in a narrow range (103.30-104.00) into tomorrow's CPI number, with bigger moves coming later in the week when we hear from the Fed, the ECB, and the BoJ.