USD/stock market correlation too tight for comfort

An 8 point swing in the S&P 500 means next to nothing but the ebb and flow of the stock market is having an outsized impact on FX today (or vice versa).

The US dollar dumped earlier and now it's stormed back. USD/JPY is back to where it started US trading at 123.00 after falling as low as 122.67.

EUR/USD still has some work to do but it's down to 1.0750 from a high of 1.0809. Another 25 pips will complete the round trip.

Liquidity is good today and it's mid-month so there are no real special factors and that makes today's trading a bit of a puzzle. Everyone is watching the Fed and Dudley is due in an hour. He's a dove so it would be particularly dollar-bullish if he talks about hiking rates.