Have fielded a few questions of late on how one can work out the probability of a rate change? Go to the Fedwatch calculator by CME is the simple answer, where you can also see a worked example for those interested in the simple math. Essentially the market is looking to the futures market to determine the probability (the larger the +difference between the expected month end FedFunds effective rate per month end futures Vs last month end effective rate the higher the prob. of a hike). Thus as I tell all my students/retail investors you should track the probability of expected cuts/hikes/no action across the majors as well as changes in yield curve differences for key tenors. This will add to your decision making capabilities and give you an edge over those that are ignoring cues from the market.
When one considers the decrease in prob. for a Fed rate hike in Sept, the equities rout of late as well as being funding currencies it is no coincidence that we have seen EUR and JPY shorts decrease. Frankly this is a great time to think about better levels for some Euro shorts.