📊💱Australian Dollar Holds Top Momentum Ranking Into April: Cable FX Macro

• The momentum strategy profits from trend persistence and has historically delivered strong risk-adjusted returns in trending, risk-on environments while struggling in choppy or sudden regime shifts.

• Year-to-date, the factor has posted modest positive returns, estimated in the +3.5% to +6% range net of transaction costs (based on typical bank-published momentum baskets and cross-sectional implementations). Early-year strength came from the continuation of 2025’s USD weakness trend (DXY down sharply in 2025). High-beta, commodity-linked currencies — especially AUD, NZD, and NOK — acted as clear winners, while JPY and EUR were persistent shorts.

• Since the Iran conflict, momentum has been resilient and actually accelerated. The sudden oil price shock (Brent crude surging above $110/bbl with diesel futures topping $200) created a classic “commodity currency rally vs. energy importers” regime.

• SG Trend Index (a broad proxy that heavily weights FX momentum) has remained in positive territory year-to-date, suggesting systematic trend strategies are still capturing the prevailing moves.

• The April model is leaning towards JPY short (again). I would suggest our readers be cautious on this part of the equation as JPY is looking oversold.