Chris Butler

2 days ago | hedgethink.com | Chris Butler

However, under the surface, risks remain elevated as Trump-led trade headlines continue to loom large over sentiment. While there was no major escalation, the threat of retaliatory action and tariff surprises kept traders cautious. The US Dollar attempted to stabilize after weeks of weakness, with the DXY index retreating 0.6% to close at 99.229, a critical support area that traders are closely watching.

1 week ago | hedgethink.com | Chris Butler

The White House’s shifting stance on trade policy left investors bewildered, with even administration insiders seemingly struggling to keep up. The result? Sharp moves across FX, bonds, and equities – and a clear message that confidence in US economic leadership is waning. The Dollar was the week’s biggest loser, despite rising yields and occasional risk-off stretches. The DXY index dropped 3% to close at 99.783, testing key support before bouncing slightly into the weekend.

2 weeks ago | hedgethink.com | Chris Butler

The impact was immediate and severe: equities plunged, Treasury yields fell, and volatility surged. China’s swift retaliation added fuel to the fire, escalating rhetoric and raising fears that a full-scale global trade war is now underway. The tone has shifted from cautious optimism to outright concern. The DXY index dropped 1.1% to 102.892, reflecting both the market’s view that the US may suffer economically and a renewed appetite for diversification away from the Dollar.

3 weeks ago | hedgethink.com | Chris Butler

By Friday, the cracks were clear: equities sold off, yields fell, and Gold surged to fresh record highs. The flight to safety is now well underway, and markets are no longer willing to wait for clarity. While FX markets remained largely contained within prior-week ranges, sentiment clearly deteriorated. The US Dollar moved broadly sideways, with marginal changes despite slightly better-than-expected GDP and Core PCE data. The DXY closed at 104.011, just below the previous week’s level.

4 weeks ago | hedgethink.com | Chris Butler

With key drivers such as Fed policy and tariff threats entering a period of wait-and-see, currency markets slipped into consolidation mode, mirroring the broader indecisiveness seen across asset classes. In the US, the Federal Reserve held rates steady, as expected, and reduced the pace of quantitative tightening – arguably the clearest signal yet that QT is nearing its end. The central bank also maintained its projection for two rate cuts later this year.