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

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

AUD/NZD is still languishing around record lows.  Pessimism over the AUD increased as the Australian economy stalled in the second half of last year, the Royal Commission into the financial sector unsettled confidence, the housing market downturn accelerated, political uncertainty peaked into the national election in May, and the RBA scurried to cut rates twice at back-to-back monthly meetings in June and July.  Now the regulatory, political and economic trends are moving in favour of the AUD and against NZD.  RBNZ is toughing capital requirements on NZ banks. The Australian housing market is stabilising, NZ’s is slowing.  The Australian political cycle is as positive as it has been for a decade, and tax cuts have been delivered.  Australian trade performance is much stronger, and its fiscal position has caught up to and over-taken NZ’s.  NZ is expected to cut rates in August and is largely pacing Australian rates lower.

AUD/NZD is still languishing around record lows.  Pessimism over the AUD increased as the Australian economy stalled in the second half of last year, the Royal Commission into the financial sector unsettled confidence, the housing market downturn accelerated, political uncertainty peaked into the national election in May, and the RBA scurried to cut rates twice at back-to-back monthly meetings in June and July.  Now the regulatory, political and economic trends are moving in favour of the AUD and against NZD.  RBNZ is toughing capital requirements on NZ banks. The Australian housing market is stabilising, NZ’s is slowing.  The Australian political cycle is as positive as it has been for a decade, and tax cuts have been delivered.  Australian trade performance is much stronger, and its fiscal position has caught up to and over-taken NZ’s.  NZ is expected to cut rates in August and is largely pacing Australian rates lower. 

Big Issues Holding Down AUD/NZD Have Flipped

It might be odd to suggest that the AUD will rise just at the point when the RBA has gone to max-dovishness.  But yet we are. RBA dovishness is matched by the Fed.  The global pivot to easier policy is boosting EM and commodity currencies, and the AUD has lagged its peers, suggesting upside risk.  Australian equities are outperforming, reflecting both external factors and positive news at home.  Just as the RBA, investors, and Aussies get themselves in a funk, the news has got better, quite a bit better.  The LNC was returned surprisingly and emphatically.  They plan tax cuts and are likely to respond to increasing pressure to further boost infrastructure spending.  The housing market is stabilising, boosted by regulatory credit easing and the return of the market-friendly government.  The AUD is way underdone relative to commodity prices, the external balance is at a generational high, and the government budget is in rude health.  The focus on US-China trade relations and RBA policy has hit the AUD, but may have had maximum impact.  The Xi-Trump meeting next weekend could go either way, but if talks resume and further tariff increases put on hold, we expect some modest further rise in risk appetite and upside for the AUD.

It might be odd to suggest that the AUD will rise just at the point when the RBA has gone to max-dovishness.  But yet we are. RBA dovishness is matched by the Fed.  The global pivot to easier policy is boosting EM and commodity currencies, and the AUD has lagged its peers, suggesting upside risk.  Australian equities are outperforming, reflecting both external factors and positive news at home.  Just as the RBA, investors, and Aussies get themselves in a funk, the news has got better, quite a bit better.  The LNC was returned surprisingly and emphatically.  They plan tax cuts and are likely to respond to increasing pressure to further boost infrastructure spending.  The housing market is stabilising, boosted by regulatory credit easing and the return of the market-friendly government.  The AUD is way underdone relative to commodity prices, the external balance is at a generational high, and the government budget is in rude health.  The focus on US-China trade relations and RBA policy has hit the AUD, but may have had maximum impact.  The Xi-Trump meeting next weekend could go either way, but if talks resume and further tariff increases put on hold, we expect some modest further rise in risk appetite and upside for the AUD.

RBA Has Been Trying to Hold the AUD Beach Ball Under Water; Its Time May Be Up

Macroeconomics

It appears central banks have pivoted towards delivering more policy easing to bolster inflation expectations that have plumbed new lows this year.  The Fed has the greatest scope to ease policy, and the prospect of deep rate cuts has undermined the USD.  However, the Fed is struggling to gain the initiative and appears to be reacting to market pressure and outside criticism rather than setting its own agenda. Gold has broken the range highs over the last six years and may have further to run as central bank policy easing sends investors in search of alternatives to fiat currencies.  Trump's attacks on the Fed’s independence and threats against other countries alleged attempts to devalue their currencies cannot be helping the dollar and adds support to gold.  A range of geopolitical risks driven by unprecedented US administration aggression may further support gold.  A G20 attempt to restart US-China trade negotiations may provide a reprieve for the USD and US yields, and provide a dip in gold. Facebook’s Libra represents yet another threat to the USD. Its announcement in the same week as Trump stomps on the institutional underpinnings for the USD is a foreboding sign.

It appears central banks have pivoted towards delivering more policy easing to bolster inflation expectations that have plumbed new lows this year.  The Fed has the greatest scope to ease policy, and the prospect of deep rate cuts has undermined the USD.  However, the Fed is struggling to gain the initiative and appears to be reacting to market pressure and outside criticism rather than setting its own agenda. Gold has broken the range highs over the last six years and may have further to run as central bank policy easing sends investors in search of alternatives to fiat currencies.  Trump's attacks on the Fed’s independence and threats against other countries alleged attempts to devalue their currencies cannot be helping the dollar and adds support to gold.  A range of geopolitical risks driven by unprecedented US administration aggression may further support gold.  A G20 attempt to restart US-China trade negotiations may provide a reprieve for the USD and US yields, and provide a dip in gold. Facebook’s Libra represents yet another threat to the USD. Its announcement in the same week as Trump stomps on the institutional underpinnings for the USD is a foreboding sign.

Which Currency Do You Want to Hold – Gold, Crypto or Fiat?

The US dollar is the official currency of the United States of America.

With a small break in the onslaught of bad news on trade barriers and talk of anti-trust investigations, US equities rebound from their recent sharp falls.  US yields are also off the deck, but the market is sending out invitations for a rate cut party, and waiting for the Fed to turn-up.  Fed Chair gave just enough hint that he might turn up, but he is still reluctant to acknowledge that risks to growth have increased. Lower US yields and hopes of rate cuts have shifted the tone from a strong dollar to a weak dollar, and this may continue for the time being. PMI data for the US from Markit have fallen sharply already pointing to weak US growth, running now below the Eurozone.  With some mixed messages from US data, payrolls data on Friday may take on even more significance.

With a small break in the onslaught of bad news on trade barriers and talk of anti-trust investigations, US equities rebound from their recent sharp falls.  US yields are also off the deck, but the market is sending out invitations for a rate cut party, and waiting for the Fed to turn-up.  Fed Chair gave just enough hint that he might turn up, but he is still reluctant to acknowledge that risks to growth have increased. Lower US yields and hopes of rate cuts have shifted the tone from a strong dollar to a weak dollar, and this may continue for the time being. PMI data for the US from Markit have fallen sharply already pointing to weak US growth, running now below the Eurozone.  With some mixed messages from US data, payrolls data on Friday may take on even more significance.

US equities couldn’t muster an end of month consolidation.  They attempted to stabilise on Thursday but closed near their lows on Friday. The weight of the news was too much – Trump expanding tariffs threats to one of its biggest and most integrated trading partners, Mexico, and trade relations hardened between China and the US. Trump plans to convince the UK to avoid Huawei, China started its own “Entity” list to potential ban US companies, and it is preparing to halt rare earth mineral exports to the US.  Optimists are giving up on a global economic recovery, and Chinese PMI data confirm its manufacturing sector is struggling already from the trade war.   The tide may be turning against the USD as the market prices in significant Fed rate cuts, its yields fall sharply, and its equity market leads recent falls.  The USA is starting to look like one of the biggest potential losers in a trade war.  Its economic data are not revealing many problems yet, but this only suggests it has further to fall.  The market is likely to dismiss stronger US economic data and panic at the first sign of weakness (raising risks around the ISM and payrolls reports next week).

US equities couldn’t muster an end of month consolidation.  They attempted to stabilise on Thursday but closed near their lows on Friday. The weight of the news was too much – Trump expanding tariffs threats to one of its biggest and most integrated trading partners, Mexico, and trade relations hardened between China and the US. Trump plans to convince the UK to avoid Huawei, China started its own “Entity” list to potential ban US companies, and it is preparing to halt rare earth mineral exports to the US.  Optimists are giving up on a global economic recovery, and Chinese PMI data confirm its manufacturing sector is struggling already from the trade war.   The tide may be turning against the USD as the market prices in significant Fed rate cuts, its yields fall sharply, and its equity market leads recent falls.  The USA is starting to look like one of the biggest potential losers in a trade war.  Its economic data are not revealing many problems yet, but this only suggests it has further to fall.  The market is likely to dismiss stronger US economic data and panic at the first sign of weakness (raising risks around the ISM and payrolls reports next week). 

Safe Haven Status of the USD Starting to Crumble Under the Weight of Trump’s Trade Wars

Greg has had a long career in foreign exchange, beginning at the Reserve Bank of Australia in 1989.  He was the first economics graduate at the Bank to be assigned to the foreign exchange dealing desk. Greg learnt from highly respected stewards of policy and market development at the Bank.  He played a leading role in establishing the Bank’s approach to asset and currency management of its international reserves, and managed the Bank's Japanese bond portfolio for a year before joining the private sector in 1995.

In October 2015, Greg launched his own FX research company, Amplifying Global FX Capital, after completing duties at the Royal Bank of Scotland in Singapore where he was the Head of Asia Pacific Markets Strategy since February 2014.  His flagship  report (AmpGFX) is available here on SmartKarma.

He has maintained a trading track record since March 2013. The results are very good over this period. There have been significant macro developments that suit his approach to markets. He is now managing his own capital and will often have positions in the markets that he is writing about in his AmpGFX report.

For a detailed biography and trading performance analysis head to the ampGFXcapital.com website.