I certainly wouldn't have guessed it
The decade is ticking down.
It started in utter turmoil in financial markets and it's ending with better sentiment in global growth. Without looking, my inclination would have been that it was a good run for risk assets, if only because stock markets did so well.
The answer was a stark reminder about the importance of interest rates, at least in the first few years of the decade. The best performer over the decade was short AUD/CHF with a return just shy of 30%, excluding carry. If you add back the carry, I imagine it comes out closer to flat.
What's remarkable about this trade is that it shows how much the starting point matters. Australia has posted growth in every year this decade and probably has the best or second-best GDP growth among developed market currencies in that span. Switzerland, meanwhile, has been mired in near-zero growth.
Yet at the start of the decade the RBA cash rate was 3.75% while Switzerland has been stuck at the lower band and below. But it was the change that mattered and the cuts from the RBA were deeper than the SNB.
So what will be the best performer of the 2020s?
My guess is that it will be the pound. It's still at depressed levels and eventually the government is going to start caring about growth again. Or maybe I'm naive.
