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

New Zealand rates plunged and the NZD dropped relatively sharply after the RBNZ said the next move in rates was more likely to be a cut.  The RBNZ appeared to be significantly influenced by the policy easing abroad and upward pressure on the NZD.The RBA shifted from a mild tightening bias to a neutral bias in February.  Since then it should be much less sure that current policy settings will return inflation to its target.  We expect them also to acknowledge that the balance of risks to their forecasts have shifted to the downside.

New Zealand rates plunged and the NZD dropped relatively sharply after the RBNZ said the next move in rates was more likely to be a cut.  The RBNZ appeared to be significantly influenced by the policy easing abroad and upward pressure on the NZD.The RBA shifted from a mild tightening bias to a neutral bias in February.  Since then it should be much less sure that current policy settings will return inflation to its target.  We expect them also to acknowledge that the balance of risks to their forecasts have shifted to the downside.

RBNZ Pressures the RBA to Adopt Easing Bias

Q2 was a good quarter after a lacklustre three quarters.  Government spending is starting to kick in and may help support the economy, but business activity and consumer confidence surveys suggest growth will sag through the rest of the year.  The RBNZ is likely to retain a neutral policy message in its statement next week, waiting for clearer evidence on the economy from Q3 labour and inflation reports.  The ANZ business activity survey next week may be important for near-term sentiment.  NZD gathered momentum from the GDP report and a broad rebound in global assets. The market continues to seek a big-picture top in the USD, but rising US inflation and tariff policy remain key supports for the USD.

Q2 was a good quarter after a lacklustre three quarters.  Government spending is starting to kick in and may help support the economy, but business activity and consumer confidence surveys suggest growth will sag through the rest of the year.  The RBNZ is likely to retain a neutral policy message in its statement next week, waiting for clearer evidence on the economy from Q3 labour and inflation reports.  The ANZ business activity survey next week may be important for near-term sentiment.  NZD gathered momentum from the GDP report and a broad rebound in global assets. The market continues to seek a big-picture top in the USD, but rising US inflation and tariff policy remain key supports for the USD. 

New Zealand GDP Post-Mortem – NZD Still Vulnerable

The USA fired off its biggest missile yet in its trade war with China and has rolled up more artillery.  There is little doubt that they are in for the long fight and this poses significant downside risks for Asian markets.  AUD has been a proxy for tariffs and rebounded on Tuesday, in-line with a bounce in Asian currencies and equities.  But the trade war suggests this reprieve may be short-lived.  If you close one eye, the Australian economy is performing well, and the AUD looks cheap.  But if you open both eyes, the downside risk coming from China, housing and the next election is large. The falling Australian housing market may bring to the surface more problems for banks over past lending practices.  New Zealand economic survey data is pointing to a weak second half and rising risk of significant further RBNZ rate cuts.

The USA fired off its biggest missile yet in its trade war with China and has rolled up more artillery.  There is little doubt that they are in for the long fight and this poses significant downside risks for Asian markets.  AUD has been a proxy for tariffs and rebounded on Tuesday, in-line with a bounce in Asian currencies and equities.  But the trade war suggests this reprieve may be short-lived.  If you close one eye, the Australian economy is performing well, and the AUD looks cheap.  But if you open both eyes, the downside risk coming from China, housing and the next election is large. The falling Australian housing market may bring to the surface more problems for banks over past lending practices.  New Zealand economic survey data is pointing to a weak second half and rising risk of significant further RBNZ rate cuts.

Risks for AUD and NZD Rising to the Surface

In our view, downside risk for Australian interest rates and the AUD have increased significantly.  The persistent increase in bank funding costs that has led Westpac to raise mortgage rates is a further tightening of monetary conditions and comes at a precarious time for the housing market.  Australian political risk has increased as an election approaches in around six months. Recent economic data suggest some moderation in activity.  US inflation pressure continues to build, and US rates are set to rise further.  The Trump administration is intensifying its trade and economic pressure on China, dampening the outlook for the CNY, and Asia region assets.  Emerging markets globally are demonstrating heightened vulnerability to rising US rates which has, and is likely to continue to, spill over to a weaker AUD.  The RBNZ may also surprise the market and cut rates before year-end.

In our view, downside risk for Australian interest rates and the AUD have increased significantly.  The persistent increase in bank funding costs that has led Westpac to raise mortgage rates is a further tightening of monetary conditions and comes at a precarious time for the housing market.  Australian political risk has increased as an election approaches in around six months. Recent economic data suggest some moderation in activity.  US inflation pressure continues to build, and US rates are set to rise further.  The Trump administration is intensifying its trade and economic pressure on China, dampening the outlook for the CNY, and Asia region assets.  Emerging markets globally are demonstrating heightened vulnerability to rising US rates which has, and is likely to continue to, spill over to a weaker AUD.  The RBNZ may also surprise the market and cut rates before year-end.

RBA Rate Cut May Soon Be Back on the Table

In a follow-up note from our report last week (<a href="https://www.smartkarma.com/insights/major-commodity-currencies-may-diverge-cad-set-to-shine" target="_blank">Major commodity currencies may diverge – CAD set to shine</a>) we preview the RBA and RBNZ policy meetings next week and see risks of dovish surprises in both.  Business surveys have ebbed, particularly in New Zealand.  The Australian economy is showing more resilience, but risks from a housing market downturn are intensifying.  Uncertainty in global markets, particularly related to US-China trade relations, may be increasing.  Even a subtle shift in message from both central banks may place significant downward pressure on their currencies.  In contrast, Canadian economic reports showed strength, and this may be reinforced next week.

In a follow-up note from our report last week (Major commodity currencies may diverge – CAD set to shine) we preview the RBA and RBNZ policy meetings next week and see risks of dovish surprises in both.  Business surveys have ebbed, particularly in New Zealand.  The Australian economy is showing more resilience, but risks from a housing market downturn are intensifying.  Uncertainty in global markets, particularly related to US-China trade relations, may be increasing.  Even a subtle shift in message from both central banks may place significant downward pressure on their currencies.  In contrast, Canadian economic reports showed strength, and this may be reinforced next week.

New Zealand

The New Zealand dollar is the official currency of New Zealand.  

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NZD (NZD BGN CURNCY)

RBNZ Pressures the RBA to Adopt Easing Bias

New Zealand rates plunged and the NZD dropped relatively sharply after the RBNZ said the next move in rates was more likely to be a cut. The RBNZ...

Greg Gibbs

New Zealand GDP Post-Mortem – NZD Still Vulnerable

Q2 was a good quarter after a lacklustre three quarters. Government spending is starting to kick in and may help support the economy, but business...

Greg Gibbs

Risks for AUD and NZD Rising to the Surface

The USA fired off its biggest missile yet in its trade war with China and has rolled up more artillery. There is little doubt that they are in for...

Greg Gibbs

RBA Rate Cut May Soon Be Back on the Table

In our view, downside risk for Australian interest rates and the AUD have increased significantly. The persistent increase in bank funding costs...

Greg Gibbs

RBA and RBNZ May Reveal Doubts

In a follow-up note from our report last week (Major commodity currencies may diverge – CAD set to shine) we preview the RBA and RBNZ policy...

Greg Gibbs

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