August 2024 Monthly Report

Read the Ballinger Monthly Report for August below.

The main theme for July was a broadening in the factors exerting significant influence on the FX markets, which is adding extra layers of complexity that have at times been difficult to disentangle.

Politics grew in importance. The ‘Trump trade’ in the US became a repeatable and recognisable set of market movements that shifted the shape of the bond yield curve and boosted the dollar and stocks when his chances of winning the election rose. In the UK, politics looked remarkably stable compared to the continent, and that helped sterling.

Elsewhere, the unwind of the carry trade drove huge rallies in the yen and the franc, while bouts of risk aversion hit the Nordics (NOK, SEK) and the Antipodeans (AUD, NZD) particularly hard. The timing and pace of rate cuts remains essential, however, with more and more central banks bringing down interest rates.