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A deeper change is happening in the markets. The “risk on” / “risk off” behavior is fading away.

In the video below, Simon Smith of FxPro discusses the drop in the VIX volatility index, the changing relation between high beta currencies, the dollar and stocks.

The changes in behavior come on the background of the recent Fed decision, which didn’t change policy but upped the tone regarding employment and inflation.

Also note the rising US yields, which support USD/JPY, but also have impact on other dollar pairs around the world.

Smith does point out to certain domestic topics that push higher yielding currencies lower, but the shift is wider than a potential rate cut in Australia and Brazil’s push to weaken its currency.

Are we back to the “old normal”? Things are definitely changing.