The EUR/USD pair appreciated steadily, reaching a five-month high of 1.09520 with a gain of approximately 5.30% before pulling back. This rally was fueled by expectations of accelerated Eurozone expansion following Germany’s announcement of a €500 billion investment in defense and infrastructure.
Meanwhile, weak U.S. economic data and concerns over potential policy shifts contributed to the dollar’s continued underperformance. The U.S. Dollar Index (DXY), which tracks the dollar’s value against six major currencies, hovered near a four-month low of 103.30. February’s inflation report showed a greater-than-expected decline to 2.8% year-over-year, falling short of the anticipated 2.9% and raising recession concerns. As a result, traders priced in expectations of three Fed rate cuts this year, up from fewer than two at the start of the year.
Conversely, Germany’s significant investment is expected to be inflationary, leading traders to anticipate only one ECB rate cut this year, down from two previously expected. This outlook supports stronger growth prospects and increased global capital flows into the Euro, reinforcing its rally. Similarly, the GBP/USD pair surged from 1.25 to 1.29, driven by bullish momentum as traders expected the Bank of England (BOE) to maintain its current interest rate stance amid continued wage growth in the UK.
Gold (XAU/USD) also saw strong demand due to geopolitical tensions and fears of U.S. economic instability. It reached an all-time high of $3,057 before pulling back to $3,014. With the Fed signaling potential rate cuts and geopolitical risks remaining elevated, gold is expected to remain well-supported in the near term.
The first half of March saw significant directional movements across major currencies, with the Euro and Pound posting strong gains, while the U.S. Dollar, Canadian Dollar, and Japanese Yen experienced declines. Market volatility was fueled by evolving central bank policies, geopolitical tensions, and ongoing economic uncertainties.
Despite some temporary floating losses due to Euro strength, our systems managed risk effectively, ensuring no risk thresholds were breached. As of this report, the Euro is showing signs of reversion, while the U.S. Dollar has slightly rebounded following the Fed’s reaffirmation of its cautious stance on rate adjustments.
System Specifics
R-10 & R-50
R-10 and R-50 delivered solid performance in the first two weeks of March, gaining 2.1% and 1.83%, respectively.
Both systems operate using the same core subsystems, with R-10 applying additional filters for smaller trade sizes, making it suitable for lower capital requirements. While R-50 typically provides superior diversification and returns, R-10 outperformed this period due to heightened market volatility—though this trend is expected to normalize over the long term.
For R-50, the top-performing currency pairs were AUDCAD, NZDCAD, and EURAUD, while the largest floating loss was incurred on a EUR/USD short position. The Euro’s sharp rally followed Germany’s announcement of major infrastructure and defense investments, boosting confidence in the Eurozone economy. Meanwhile, the U.S. Dollar weakened amid disappointing economic data and policy uncertainty.
Both systems are positioned for a recovery as market conditions stabilize. In March, R-50 executed 844 trades with a 73% win rate and an average holding period of 24 hours. Its Profit Factor—measuring total profits against total losses—stood at 1.61, reflecting strong system efficiency.
R-10 executed 208 trades with an 81% win rate and an average holding period of 24 hours. Its Profit Factor was 2.31, demonstrating excellent risk-reward efficiency.
R-400
R-400 performed well in early March, posting a 4.81% return as of this report.
The system executed 1,287 trades with a 76% win rate and an average holding period of 24 hours. Its Profit Factor stood at 2.21, reflecting strong efficiency in trade execution and risk management.
R-400 experienced both strong gains and temporary losses. The top-performing currency pairs were AUDCAD, EURGBP, and NZDCAD, while EUR/USD and USD/JPY saw losses. The Euro’s significant rally following Germany’s investment announcement drove short-term losses, but the system is expected to recover as the Euro stabilizes. At the time of writing, EUR/USD has already retreated from its peak of 1.095 and is trading around 1.0795. The U.S. Dollar has also shown signs of stabilization after the Fed reiterated a cautious approach to further rate cuts.
By mid-March, the top three pairs in terms of exposure were AUDCAD, EURUSD, and NZDCAD. With upcoming system re-optimizations at the end of the month, we expect a strong recovery from recent drawdowns.
Outlook & Roadmap
Our roadmap for the coming weeks includes the following key developments, applicable across all Ridge Capital Solutions systems:
- Scheduled Review & Optimization: We will assess and optimize all trading subsystems at the end of March, adjusting strategies as needed to improve performance.
- Refinement of Trade Filtering: Enhancing trade selection criteria to prevent overexposure to specific asset classes.
- Expansion of Database & System Architecture: Integrating an extensive database of over 1 million subsystems to enhance diversification and adaptability.
- Execution & Stability Enhancements: Implementing system-wide refinements to improve execution quality and overall efficiency.
We remain committed to delivering robust and adaptable trading solutions through continuous innovation and optimization.