Insights

The dollar outperformed the other major currencies in September, with the yen the sole exception, supported by a stellar NFP report, firmer August producer-price inflation and increasingly hawkish Fed commentary. These developments strengthened expectations of a rate hike at the September 16 meeting, where the Fed subsequently raised rates by 25bp and delivered a hawkish message. Strong September S&P Global PMIs and rising Treasury yields further supported the greenback, helping it extend its gains.

The yen staged a strong recovery early in the month as sharp moves in USD/JPY raised concerns about renewed rate checks by Tokyo, while hawkish BoJ commentary provided additional support. However, although the BoJ raised rates, its message was less hawkish than expected, while two policymakers dissented, prompting the yen to give back some of its gains. Gold initially rebounded following the FOMC decision but reversed lower shortly afterwards, as hawkish Fed guidance and rising yields increased the opportunity cost of holding the precious metal.

The IXI strategy performed well in September, generating positive returns across most instruments, with gold making a particularly significant contribution. Performance was supported by a generally favorable market environment, which allowed the strategy to capitalize on directional opportunities. Gold was the primary driver of returns, as the strategy captured a significant portion of the late-September move with positioning aligned to the prevailing trend as momentum strengthened. This highlighted the strategy’s ability to identify and capitalize on sustained directional moves when market conditions become more pronounced. Importantly, performance was not solely driven by gold, as most of the other instruments traded by the strategy also ended the month in positive territory.