Insights

The US dollar underperformed most of its major peers in September on expectations that the Fed would soon embark on a long easing cycle. Investors maintained their dovish bets after the Fed did indeed cut rates by 50 basis points; even assigning a decent likelihood for a back-to-back double cut in November.

The main winner was the aussie, which alongside the kiwi, received a strong boost towards the end of the month after China announced several stimulus measures to kickstart its economy, with the Shanghai Composite rising by more 20% since bottoming on September 13. The yen was fueled by expectations that the Bank of Japan will raise interest rates again by the end of the year, while the pound benefited from the Bank of England’s signals that they are in no rush to lower interest rates. The euro found resistance near the 1.12 zone against its US counterpart and pulled back after the disappointing Eurozone PMIs, which increased the likelihood of an October rate cut by the European Central Bank.

Gold rose more than 5% during the month and hit a record high on September 26, amid expectations of lower interest rates moving forward and increasing tensions in the Middle East.

September proved to be one of the strongest months of the year for the IXI Fund. Despite a rocky start, with losses during the first week due to short-term price reversals, the market dynamics soon shifted. This allowed the strategy to seize market momentum and deliver significant gains.