Dollar’s trajectory appears different going forward, more weakness ahead? – Month in Review: February 2023
Macroeconomic Environment Review
After experiencing four months of consecutive declines, the US Dollar Index rebounded by 3.0% in February. The strength of the US Dollar was widespread, but not uniform. The Yen was the primary loser, falling by 4.8% against the Dollar due to increased uncertainty regarding the future policy path under the incoming BoJ Governor Ueda.
We believe that the currency market trends in 2023 will be fundamentally different from those in 2022. Despite the ongoing war in Ukraine, global growth momentum remains positive and improving, and a recession has been avoided. Unless new shocks or geopolitical tensions arise, global uncertainty is expected to decrease further, and risk appetite is expected to improve. Additionally, we expect that the disinflation trend will continue to slow down, but will remain intact.
Terminal central bank rates are becoming more clear, indicating a significant change from last year and pointing towards more US Dollar weakness. However, there are risks, including a potential second round of rising inflation if disinflation gives way and a recession later in 2023 or 2024.
Monthly Performance Review
During the month of February 2023, AENAON Syncro Strategies generated the following total returns net of fees:
Chart 1: Monthly Performance vs. Benchmark Indices – February 2023
Charts 2, 3 and 4: Inception-to-Date Performance vs. Benchmark Indices
You can always review our updated factsheets at the following Fundpeak links, with monthly performance updates and statistics since inception: