Market Commentary July 2020

July was a relatively flat month for growth assets. Standout returns were achieved on hedged international equities as the Australian dollar continued to strengthen, a thematic over the last 3 months which now sees almost identical returns across hedged and unhedged equities over the past 12 months. The Australian dollar‘s recent appreciation is mostly against the US dollar, and partly reflects the buoyancy of the iron ore price (supported by central bank growth stimuli and supply constraints) plus the favorable interest rate differential between the US at zero and Australia at 0.25%. The US Dollar Index – a measure of the value of the US dollar relative to the currencies of a basket of the United States’ major trading partners – fell 4.15% during July.