Insights

The US dollar traded lower against most of the other major currencies in February. It began the month on the back foot after Trump postponed tariffs on Mexico and Canada, alleviating concerns that tariffs could refuel inflation and delay Fed rate cuts. However, paradoxically, the dollar continued to fall later in the month when Trump toughened his tariff stance as weak US data fueled fears of deep economic wounds rather than sticky inflation.

The risk-linked aussie and kiwi were the main losers, weighed down by broader risk aversion and Trump’s tariff policies targeting China, Australia’s and New Zealand’s main trading partner. The yen was the main gainer, bolstered by hawkish signals from the Bank of Japan and accelerating inflation. The pound was the second-best performer as strong UK data allowed traders to scale back their Bank of England rate cut bets, while the euro benefited from the initiation of Ukraine peace talks. Gold hit a fresh record high amid heightened market uncertainty.

February proved to be a strong month for the IXI Fund. Gains were accumulated in the first three weeks of the month, during which the strategy exhibited strong investment signals. The losses incurred during challenging market conditions in the last week of February, were not significant enough to overshadow the overall strong performance.