FX Strategist

Greg Gibbs

Fundamental analysis of topical themes in FX

Amplifying Global FX Capital

Amplifying Global FX Capital was founded in 2015 and is fully owned by Greg Gibbs. It is a registered company both in Australia and Colorado, USA and is a licensed in Australia to provide financial services.

We are producing a regular trading view orientated macroeconomic analysis of topical themes in global financial markets, with a particular focus on foreign exchange. We invite you to view an “executive summary” of these reports in “AmpGFX Reports” under our “Research” menu.

These reports are drawn from the analysis of Greg Gibbs and inform the capital management he undertakes on behalf of the company. The trading performance is posted periodically on our website. We aim to build our company into both a research and capital management business. We are currently in the planning phase for managing capital for wholesale customers.

Greg Gibbs has spent his working life of more than 26 years in financial markets, beginning in 1989 at the Reserve Bank of Australia, after completing a Bachelor of Economics Degree (Honours) at the Australian National University. He has been a CFA Charterholder since 2005. He has worked in Sydney, Singapore, New York and London for major global banks and presented on foreign exchange markets to major financial institutions and companies around the world, and maintained a high profile in the financial media.

Before Amplifying Global FX Capital, Greg was the Head of Asia Pacific Market Strategy at the Royal Bank of Scotland based Singapore. He now resides in Breckenridge Colorado.

FX & Rates

Major corrective moves may be underway in EUR and NZD. Further weakness may also be in stall for CAD and AUD.  In the case on EUR, CAD and AUD, long positions and bullish sentiment leave them vulnerable to position-squaring.  The EUR has moved too far from its yield disadvantage, and it is not as cheap as some might have you believe.  The Bank of Canada has moved into a watch-and-wait mode. The political shockwave in NZ may be the catalyst for a major realignment in the NZD’s long-run over-valuation.  AUD is suffering from weaker house price growth in Australia and China, the RBA is badly missing its inflation target, and its politics are hardly a shining example for any country.

Major corrective moves may be underway in EUR and NZD. Further weakness may also be in stall for CAD and AUD.  In the case on EUR, CAD and AUD, long positions and bullish sentiment leave them vulnerable to position-squaring.  The EUR has moved too far from its yield disadvantage, and it is not as cheap as some might have you believe.  The Bank of Canada has moved into a watch-and-wait mode. The political shockwave in NZ may be the catalyst for a major realignment in the NZD’s long-run over-valuation.  AUD is suffering from weaker house price growth in Australia and China, the RBA is badly missing its inflation target, and its politics are hardly a shining example for any country.

The NZD has taken a hit on the formation of a un-proven left-leaning coalition, after nine years of a right-leaning, essentially one-party led government that oversaw a return to significant budget surplus and stable solid economic growth.  At least some change was always coming, since the election on 23-September, as NZ First held the balance of power and was set to enter government. While the market should not have seen this outcome as a big surprise, perhaps the reality has hit home, creating further downside risk for the NZD.  We expect the new Labour-led government under new PM Ardern to provide solid leadership that keeps reasonable control over the budget.  There are reasons to see some positives for the economy, as Labour will pursue increased social and infrastructure spending.  However, Labour is planning policy changes that may significantly further weaken the housing market and cut immigration.  These measures are likely to feed through to a weaker economic outlook and a weaker NZD.  In our view, the NZD has been over-valued for some time; perhaps the change in government may prove to be a catalyst that sets the currency on a new weaker course.

The NZD has taken a hit on the formation of a un-proven left-leaning coalition, after nine years of a right-leaning, essentially one-party led government that oversaw a return to significant budget surplus and stable solid economic growth.  At least some change was always coming, since the election on 23-September, as NZ First held the balance of power and was set to enter government. While the market should not have seen this outcome as a big surprise, perhaps the reality has hit home, creating further downside risk for the NZD.  We expect the new Labour-led government under new PM Ardern to provide solid leadership that keeps reasonable control over the budget.  There are reasons to see some positives for the economy, as Labour will pursue increased social and infrastructure spending.  However, Labour is planning policy changes that may significantly further weaken the housing market and cut immigration.  These measures are likely to feed through to a weaker economic outlook and a weaker NZD.  In our view, the NZD has been over-valued for some time; perhaps the change in government may prove to be a catalyst that sets the currency on a new weaker course.

Surprisingly, futures positioning in the USD moved to a new high in net shorts on 3-Oct, despite the rebound in the USD over the last month.  It seems the market is sceptical that the recent rise in the USD will last, and has been in a ‘sell-the-rally’ frame of mind.  However, the rise in the USD has been consistent with a higher short and long-term yield advantage.  US economic reports, including the labor data on Friday, support the notion that the USD can rise further.  The USD has rallied in part due to a rejuvenated push for tax reform.  However, it appears that the market retains a significant risk premium (discounting the USD) to account for US political uncertainty.

Surprisingly, futures positioning in the USD moved to a new high in net shorts on 3-Oct, despite the rebound in the USD over the last month.  It seems the market is sceptical that the recent rise in the USD will last, and has been in a ‘sell-the-rally’ frame of mind.  However, the rise in the USD has been consistent with a higher short and long-term yield advantage.  US economic reports, including the labor data on Friday, support the notion that the USD can rise further.  The USD has rallied in part due to a rejuvenated push for tax reform.  However, it appears that the market retains a significant risk premium (discounting the USD) to account for US political uncertainty.

Skeptical Market Is Very Short US Dollars

Weak retail sales in Australia speak to the biggest fear lurking over the Australian economy; that a high and rising debt load is starting to squeeze households, even before the RBA moves to tighten policy from record low interest rates.  Australia is seeing positive signs for business and government capital expenditure, but if consumers retrench this may not be enough to rebalance the economy, or will at least stretch out the time before rates can normalise.  In the meantime, a weaker exchange rate may be required to keep the economy on a sustainable path, and the nation’s growth and exchange rate are highly vulnerable to an external shock, such as lower commodity demand from China.

Weak retail sales in Australia speak to the biggest fear lurking over the Australian economy; that a high and rising debt load is starting to squeeze households, even before the RBA moves to tighten policy from record low interest rates.  Australia is seeing positive signs for business and government capital expenditure, but if consumers retrench this may not be enough to rebalance the economy, or will at least stretch out the time before rates can normalise.  In the meantime, a weaker exchange rate may be required to keep the economy on a sustainable path, and the nation’s growth and exchange rate are highly vulnerable to an external shock, such as lower commodity demand from China.

The USD has finished each of the last three years with a run higher, and it may again end on a strong note as the market looks forward to tax reform.  The market is trading cautiously, facing a number of global uncertainties.  There is underlying strength in the US economy that appears to be underappreciated, but may support a strong year-end finish in the dollar.  Global growth remains buoyant, and emerging market assets have rebounded in recent sessions.  It is possible that they spoil the dollar’s year-end party.  However, demand for EM markets is unlikely to spill over to the AUD and NZD; low and diminishing yield advantage, and sluggish equities are likely to weigh on their performance.

The USD has finished each of the last three years with a run higher, and it may again end on a strong note as the market looks forward to tax reform.  The market is trading cautiously, facing a number of global uncertainties.  There is underlying strength in the US economy that appears to be underappreciated, but may support a strong year-end finish in the dollar.  Global growth remains buoyant, and emerging market assets have rebounded in recent sessions.  It is possible that they spoil the dollar’s year-end party.  However, demand for EM markets is unlikely to spill over to the AUD and NZD; low and diminishing yield advantage, and sluggish equities are likely to weigh on their performance.

The Dollar Has Made a Habit of Year-End Rallies

Australia

The Australian dollar is the official currency of the Commonwealth of Australia.

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AUD (USDAUD CURNCY)

Major Moves Afoot (EUR, CAD, NZD & AUD)

Major corrective moves may be underway in EUR and NZD. Further weakness may also be in stall for CAD and AUD. In the case on EUR, CAD and AUD,...

Greg Gibbs

New Zealand Dollar Charts a New Course

The NZD has taken a hit on the formation of a un-proven left-leaning coalition, after nine years of a right-leaning, essentially one-party led...

Greg Gibbs

Skeptical Market Is Very Short US Dollars

Surprisingly, futures positioning in the USD moved to a new high in net shorts on 3-Oct, despite the rebound in the USD over the last month. It...

Greg Gibbs

Australia's Deepest Fears Looming Larger

Weak retail sales in Australia speak to the biggest fear lurking over the Australian economy; that a high and rising debt load is starting to...

Greg Gibbs

The Dollar Has Made a Habit of Year-End Rallies

The USD has finished each of the last three years with a run higher, and it may again end on a strong note as the market looks forward to tax...

Greg Gibbs

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