Insights

The US dollar recorded its biggest monthly decline since November 2022 in April, underperforming all its major peers after US President Trump announced sweeping tariffs on April 2 – dubbed “Liberation Day” – targeting all of the US’s key trading partners. Although the administration walked back slightly just days later, introducing a 90-day delay on reciprocal tariffs and granting some exemptions, tensions with China escalated. The world’s two largest economies found themselves once again locked in a tit-for-tat tariff battle.

The renewed trade friction took a heavy toll on risk-sensitive currencies, with the aussie finishing the month as the second-worst performer. Mounting recession fears spurred a flight to safety, bolstering currencies such as the Swiss franc and the Japanese yen. The euro, too, assumed a safe-haven role, as investors rotated away from US assets. Concerns over a looming US recession led to a significant unwinding of foreign-held US assets, with a notable portion repatriated into euros – reflecting the Eurozone’s substantial exposure to US markets. Gold emerged as another major beneficiary of the turbulence, surging to a new all-time high on April 22 before retracing slightly.

The IXI Fund delivered a solid return in April, amid a backdrop of renewed geopolitical tensions and significant financial developments. The strategy successfully navigated elevated market volatility, with strong directional moves providing a favorable environment for gains to build and hold throughout the month. Interestingly, while the tariff announcement was extreme in tone and content, it served to reduce speculation on the matter, giving markets a clearer sense of direction and improving trading conditions for the IXI strategy.