Insights

The US dollar and Wall Street rose in tandem in June as rising expectations that the Fed would cut rates twice in 2024 boosted stocks to fresh records but failed to make a dent in the former. However, Fed rate cut bets only underscored the rally in equities, with AI mania continuing to be the primary driver.

Yet, June was characterized by somewhat increased volatility, including the euro, which was rocked by political uncertainty after France’s surprise call for a snap election. The euro’s losses would have been greater had it not been for the ECB’s hawkish rate cut.

The yen plummeted to 38-year lows against the dollar as markets were unconvinced by the BoJ’s signals that it would trim its bond purchases and potentially hike rates too. Oil futures had a positive month as major central banks shifted towards rate cuts, with investors ignoring signs of a slowing US economy. Gold, meanwhile, was stuck in a sideways range.

The IXI Fund capitalised on the increased volatility during the first part of the month, locking some gains which were subsequently drained away due to the lowered volatility and sideways movements. June, similar to May, closed quite flat with the total monthly return being slightly negative.