U.K.-based Blackfish Capital’s four-month old Exodus Fund ended July down 9.38%, pushing it into the red year-to-date with a loss of 8.65%.

Portfolio manager Toby Birch said July was one of the worst months for hedge funds in many years “with volatility at incredible levels for specific sectors.”

“Anyone who has played the trade of the year (short financials, long commodities) would be looking at huge losses,” wrote Birch, in an investor letter. “At one stage, mining stocks had declined by 25%, while banking sector rallied on a similar scale. Needless to say, the dollar has been firmer as commodity prices came a cropper.”

The Exodus Fund’s long portfolio includes both physical commodities and energy, as well as currencies, including those of the Middle East and the Chinese yuan. Its short book may include the Russell 2000 Index, retail stocks and housing names.

Going forward, Birch said currencies and bonds, which have been “moribund of late”, may make a major move in August. And while the dollar appears to be over-sold based on purchasing power parity, Birch said investors should step back and realize that America is caught in a debt trap, “as restrictive as any medieval iron maiden.”

“The only relief valve is more dollar weakness,” he said.

Blackfish in June also launched the Talisman Fund, a $20 million global long/short energy hedge fund. All told, the firm currently manages some $56 million in assets.