In many ways, Tuesday’s script resembled Monday’s price action as the EUR and the CHF continue to be the main winners, even if this time the CAD also joined the bullish party as Oil rose to the best levels in  weeks. The AUD and NZD remained weak again as chatter builds up that the RBA will step up its easing measures near term.

The European block (EUR, CHF) were the main beneficiaries as a new weeks gets underway while the USD was initially under strong pressure for most of the day only to rebound quite decisively late on the day. The Oceanic currencies could not find any love with both the AUD and NZD imploding mid way through the European session as the losses in equities weighted towards the allure of ‘risk-on’ fiats.   

We had a classic fly to safe haven assets with no particular catalyst once again. The usual suspects (USD, JPY, CHF, Gold) were the main risers while commodity-linked currencies (AUD in particular) and the GBP fell sharply amid the sell-side flows in equity indices since Europe.

The story of the day in the currency market was the renewed strength in the British Pound after the UK signaled that the Oct 15 deadline talks to get a trade deal done with the EU will drag on. 

It was turnaround Tuesday as risk-off came back rather aggressive leading to a steady bid in the US Dollar, Japanese Yen and a surprisingly strong Canadian Dollar, decoupled from the underperformance of other commodity-related assets (AUD or Gold). The Pound also suffered from the lack of clarity on Brexit. 

If last Friday was all about USD weakness with out without a fiscal stimulus deal in the US, in the first day of the new week the dominant theme was the surge in US stocks with or without Columbus Day as the Nasdaq index leads the charge into higher territory.