Insights

The US dollar lagged nearly all its major counterparts in June, marking its worst first half-year performance in over five decades. Although the Israel-Iran conflict briefly revived demand through safe-haven flows, the subsequent truce, combined with mounting expectations of Fed rate cuts, reignited the currency’s prevailing downtrend. Trump’s pressure on Powell, alongside a couple of policymakers supporting the case of a July cut, prompted investors to pencil in 65bps worth of rate cuts this year.

The only currency against which the dollar did not underperform was the yen, with dollar/yen closing the month near its opening levels as the BoJ’s cautious stance raised doubts about whether a hike will be appropriate before year-end. The euro emerged as the top performer as the ECB hinted at a pause in its easing cycle, with money markets pointing to only one more quarter-point cut by February 2026. The pound appreciated against the dollar but struggled against the euro, as the BoE appeared dovish at its latest meeting. Gold also finished the month virtually flat, gaining during the first half and pulling back during the second while easing tensions in the Middle East and encouraging headlines on trade negotiations spurred a broader appetite for risk.

June proved to be a particularly turbulent month for the markets, driven largely by ongoing global geopolitical tensions. The resulting uncertainty and frequent breaking news triggered erratic market behavior, leading to sharp, short-term price movements in opposing directions over a short period of time. This environment presented challenges for the IXI strategy, which struggled to maintain effective market positioning. As a result, the strategy experienced fluctuations in performance throughout the month. Although the strategy held an overall positive return well into the month, losses sustained in the final week ultimately led to a negative overall performance for June.