Insights

The US dollar outperformed all its major peers in June after the Fed maintained a hawkish stance, with the implied rate path shifting higher as nearly half of policymakers projected at least one additional rate hike by year-end.

Sterling ranked second, initially weakening on reports of PM Keir Starmer’s resignation before rebounding as political uncertainty eased. Growing support for Andy Burnham and his commitment to existing fiscal rules reassured investors, limiting downside pressure on the pound. The euro finished third as the ECB maintained a cautious stance, reiterating that future policy decisions will remain data-dependent, and refraining from pre-committing to additional rate hikes.

Meanwhile, the yen remained under heavy pressure, with the dollar/yen climbing above 162.00 for the first time in four decades despite repeated intervention warnings from Japan’s finance minister.
Investors remained skeptical that the Bank of Japan would tighten policy aggressively enough, particularly as Prime Minister Takaichi’s appointments and upcoming board changes point to a more dovish policy outlook.

Gold extended its decline, briefly falling below the 4,000 level as rising US Treasury yields and a stronger dollar increased the opportunity cost of holding the non-yielding precious metal.

June was a strong month for the IXI strategy, as it effectively capitalised on the underlying market trends. While global markets continued to navigate geopolitical tensions, evolving central bank policy making and questionable practices, markets exhibited a greater degree of stability, characterised by fewer intraday reversals and more sustained directional moves. These improved market conditions provided a favourable backdrop for the strategy to build conviction and maintain momentum through timely positioning, resulting in strong gains over the course of the month.