Insights

President Trump’s trade policies continued to drive the markets in March as tariffs were on and off again, heightening uncertainty about the outlook. The US dollar recorded its third consecutive monthly loss, as investors were more worried about the impact of tariffs on the American economy than on the rest of the world, pricing in additional rate cuts even as the Fed maintained its wait-and-see stance at its March meeting. 

The euro had its best month in more than two years, as apart from the weaker dollar, sentiment was boosted by the German parliament’s approval of a massive defence and infrastructure spending bill. The pound also had a good month, aided by expectations that the UK might avoid steep tariff hikes, while the Canadian dollar appreciated after Trump delayed the 25% tariffs on Canadian imports imposed just two days earlier. Meanwhile, the safe-haven gold surged by over 9% to new record highs above $3,100 amid the increased risk aversion.

Our strategy experienced a profitable start to the month, delivering positive performance during the first couple of weeks. However, as the overall uncertainty surrounding tariffs heightened, the market environment became increasingly challenging to navigate. This was especially evident in some of our traded currency pairs, where sharp short-lived sideways movements resulted in accumulated losses. As a result, the Fund closed the month in negative territory.