Insights

The US dollar outperformed every other major currency in October, bolstered by strong US data and increasing market bets about Donald Trump’s potential return to the White House. Trump has pledged to cut taxes and impose tariffs, policies perceived as inflationary, which could reduce the need for aggressive rate cuts by the Fed.

The yen fell to a nearly three-month low after Japan’s ruling coalition lost its parliamentary majority in general elections, raising doubts about whether the BoJ will continue raising interest rates in the coming months. The euro, although trailing its US counterpart, was the second strongest performer. This was likely due to the Eurozone’s better-than-expected GDP data for Q3 and the hotter-than-expected preliminary inflation numbers for October, which dashed hopes that the ECB would cut rates by 50bps in December.

The pound was slightly weaker than the euro as BoE Governor’s Bailey’s dovish remarks and the further cooling in UK inflation led market participants to almost fully pencil in a 25 bps rate cut in November. Gold continued its upward trajectory, reaching fresh record highs. In addition to tensions in the Middle East, uncertainty over the US presidential election enhanced its safe-haven appeal.

October proved to be a positive month for the IXI Fund. While market conditions were mixed, our disciplined approach and cautious positioning helped navigate the challenges. Although some medium-term trends were in place, the presence of intraday price swings limited the strategy’s ability to capture larger and sustained moves. By focusing our exposure on high-conviction trades, we effectively shielded the Fund from potential drawdowns, allowing us to maintain a steady performance in a month characterized by uncertainty.