The greenback overcame considerable event risk yesterday when the Treasury Department put off a trade war and the Beige Book stayed on point with its growth and inflation outlook. However, this morning’s economic calendar, and the factory-level inflation numbers specifically, did little to recharge bulls. Without the necessary grade of fundamental fuel this morning, the majors were left trading water.

EURUSD solidified its range to a constricting 40-point band below 1.3320. The British pound was giving back more of its earlier gains pulling GBPUSD down 80 points to 1.9655 and bringing major trendline support into view. The tired dollar finally took the incline out of USDCHF. The pair was stuck in a 30-point band above 1.2430. Then again, USDJPY was took the usual USDCHF role by slowly rising 60 points to a new four and a half year high 123.15.

The dollar avoided a big pitfall yesterday. An inconvenient combination of the semiannual foreign exchange report from the Treasury Department, the Fed’s Beige Book and a proposed piece of legislation from senators determined to put the US on a path towards protectionism threatened to trigger an avalanche of volatility. Instead, the dangerous cocktail hardly caused a ripple in the market as each announcement crossed the wires exactly in line with expectations. With the bulls still off their pace this morning, the market turned to the day’s releases. The headline number was the Labor Department’s Producer Price Index. The second inflation report from the group initially gave traders a startle when the annual measure of the headline number hit an eleven-month high 4.1 percent pace. However, a comparison to the core data immediately disarmed hopes of a rate hike. The less volatile reading that excluded food and energy was barely nudged higher to a 1.6 percent pace – well off of the highs back in 2005 when the Fed was in the middle of its inflation fight. Boring down into the component numbers, it was clear the 4.1 percent jump in energy prices (and more specifically the 10.2 percent surge in gasoline) was skewing the data. Given the pull back in the import price index yesterday, there seems little chance that the Fed will consider a rate hike on a volatile energy reading.

When event risk surrounding the factory inflation report deflated, there was little hope to build momentum on the remaining data on the docket. Initial jobless claims held steady at 311,000 last week, suggesting labor trends are holding steady. The mortgage delinquencies indicator for the first quarter, a relatively new indicator on the FX radar, fell back slightly to 4.84 percent. This does little to stoke fear over the housing sector’s collapse, but the pick up in subprime delinquencies should keep investors on their toes. Another reason to remain cautions - the report showed a record number of homeowners have begun the foreclosure process over the first three months of the year. Looking ahead to tomorrow, expectations for big market moves will be high again. The ever market worthy CPI will lead things off, though the IPI and PPI have set it up for disappointment. Beyond that, a U of M sentiment survey, first quarter current account balance, Empire manufacturing read and industrial production number will each take their turn at move the dollar.

Equity traders were pleased with the outcome of yesterday’s Beige Book and this morning’s misleading inflation data. The benchmark indices were working on a strong follow up to yesterday’s late-session rally. By 15:40 GMT, the tech-heavy Nasdaq Composite up 0.6 percent at 2,597.76. The Dow 30 was giving a solid performance in a 0.45 percent climb to 13,542.67 while the S&P 500 rose 0.41 percent to 1,521.89. In the overall buoyant market, there were a few standout active stocks that volatility traders were taking note of. Financial powerhouse Goldman Sachs was moving markets after reporting second quarter earnings that were above expectations and topped activity the year before. However, investors seemed more concerned with sub-prime mortgage exposure for future performance as Goldman shares dropped 2.7 percent to $227.23 after the news. From the corporate to M&A headlines, Steel Dynamics agreed to acquire The Techs, a steel galvanizing company, for $360 million. Shares of Steel jumped 3.5 percent to $43.45.

Treasuries stabilized by mid-day as the session’s economic releases failed to break the standoff between yields at five-year highs and investors’ growing interest in collecting at that rate of return. The 10-year note was only 3/32nds lower at 94-17 at 15:40 GMT with its yield up a single basis point at 5.213. The thirty-year bond was off 1/32nd at 92-02 as its yield sat unchanged at 5.282.

John Kicklighter is a Currency Strategist at FXCM.