Comments from Dudley due at the bottom of the hour
The market is suddenly skittish about a September Fed hike. The thinking is that China is exporting deflation and it will give the Fed pause.
The Sept Fed funds futures contract is pricing about a 40% chance of a hike now compared to 54% a few days ago.
This news isn't sudden but it's the big reason the market has suddenly turned on the US dollar. The trade may stretch a bit further if the Fed's Dudley does his usual dovish dance. Within the 'core' of the Fed, he's the main proponent for keeping rates lower for longer.
