USD review

Western Union notes:

The dollar held broad gains following mixed news on America's housing sector. Housing starts were down 11.1 percent in May to an annual pace of 1.04 million units, giving back some of its 22.1 percent surge in April which was the fastest since late 2007. On the bright side, building permits, a leading indicator of future housing starts, soared 11.8 percent to the healthiest level since August 2007. 

Key for the dollar from the Fed this week will be where the central bank sees the U.S. economy and interest rates headed over the coming years. Any steeper trajectory of rate increases compared to market expectations would be dollar-positive. 

But if the Fed should go to great lengths to drive home a gradualist approach to lifting rates it would limit gains for the dollar. Any signaling of a later liftoff in rates beyond September would be dollar-negative.