The dollar is extending its losses after Core PCE - among the Fed's most critical inflation indicators - slumped to just 1.29% YoY, the lowest since Oct 2015.
Headline PCE disappointed (+1.4% vs +1.5% exp) and was unchanged from July's print but Core PCE was considerably worse.
Despite Yellen's constant talk of 'transitory' shifts, this is the 6th monthly decline in this key measure and is the biggest miss against expectations in 2 years.
And the reaction is evident in FX markets as rate-hike odds fade modestly...
