🔺🔻Dollar Trades Mixed In September: Cable FX Macro

• September 2025 delivered a surprisingly resilient performance across major asset classes, bucking seasonal headwinds and extending a multi-month rally fueled by the Federal Reserve's anticipated 25-basis-point rate cut (to 4.00-4.25%) and lingering optimism around AI-driven productivity gains. Despite escalating trade tariff rhetoric under the Trump administration and looming fiscal policy debates (e.g., the One Big Beautiful Bill Act or OBBBA), investors largely shrugged off risks, prioritizing near-trend global growth projections of ~2.5-3% for Q3. The Global Market Index (GMI)—a benchmark blending equities, bonds, and commodities—advanced 2.8%, marking its sixth consecutive monthly gain and pushing YTD returns to 15.6%. This broad-based strength contrasted with pockets of weakness, such as in energy and real estate, highlighting a risk-on environment where equities and crypto outshone safe havens like bonds.

• The dollar saw notable strength against certain currencies while struggling against others. For instance, the dollar appreciated against the Canadian dollar, buoyed by rising oil prices that supported the Canadian economy, but it faced headwinds against the Swiss franc, which is often viewed as a safe haven during times of market uncertainty. The British pound, meanwhile, experienced fluctuations due to domestic political developments and economic data releases.

• Cross-asset correlations remained low, with equities decoupling from fixed income for the third straight month, as per Cambridge Associates' analysis. Emerging markets led the charge, benefiting from tariff pauses and diversification trends away from US-China dependencies. However, the month closed on a cautious note, with markets pricing in a ~70% chance of another Fed cut in October amid softening labor signals (e.g., August's mere 22K job adds). Below, you'll find G10 biggest movers during the month of September.