Founder and CEO, Europacifica Consulting

Naomi Fink

Founder and CEO

Europacifica Consulting

FX & Rates

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/011/099/original/AUDGBP-Lhs-AUDGBP-Jan-2015-100_chartbuilder.png?1470063993" class="editor-image img-responsive" data-smartkarma-image-id="11099"><figcaption class="figcaption">Source:RBA</figcaption></figure> Although it is widely expected that the Bank of England will cut rates by 25bps on Thursday for the first time in seven years (and possibly restart quantitative easing), there is greater uncertainty about whether the Reserve Bank of Australia will lower rates on Tuesday (2 August) from 1.75% to another record low of 1.5%.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/011/108/original/RBA-cash-rate-targetPer-cent-RBA-cash-rate-targetPer-cent_chartbuilder%20%281%29.png?1470065046" class="editor-image img-responsive" data-smartkarma-image-id="11108"></figure> The ASX’s RBA rate indicator shows a 68% chance of a rate cut versus 32% probability of no change; the indicator rebounded following the release of…

Source:RBA Although it is widely expected that the Bank of England will cut rates by 25bps on Thursday for the first time in seven years (and possibly restart quantitative easing), there is greater uncertainty about whether the Reserve Bank of Australia will lower rates on Tuesday (2 August) from 1.75% to another record low of 1.5%. The ASX’s RBA rate indicator shows a 68% chance of a rate cut versus 32% probability of no change; the indicator rebounded following the release of…

Forex Focus: AUDGBP – Potential for Downard Reversal

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.

We expect the RBA to cut this week, but are not convinced and agree with the 60% chance of 25bp cut priced into the market.  A cut this week is consistent with the policy prescription set out in the RBA Statement on Monetary Policy in May when the RBA cuts rates for the first time this year to address its low inflation outlook.  We are now three months on, past the election, and on the eve of the RBA’s next forecasting round.  It more-or-less predicted that it would cut again by now in May and not enough has changed to suggest it should hold back.  The outlook for inflation remains low for the next few years.  However, the RBA may feel less compelled to act with global inflation trends low and doubts that a rate cut now will do much good anyway.  The domestic economy is tracking close to trend at this time with some positive evidence in business surveys. Given the risks to the outlook the RBA may think it best to keep its limited space to ease conventional policy up its sleeve for now.  On the other hand, not cutting is likely to generate uncomfortable gains the AUD given the lackluster performance of the USD over the last week, further undermining the inflation outlook.

We expect the RBA to cut this week, but are not convinced and agree with the 60% chance of 25bp cut priced into the market.  A cut this week is consistent with the policy prescription set out in the RBA Statement on Monetary Policy in May when the RBA cuts rates for the first time this year to address its low inflation outlook.  We are now three months on, past the election, and on the eve of the RBA’s next forecasting round.  It more-or-less predicted that it would cut again by now in May and not enough has changed to suggest it should hold back.  The outlook for inflation remains low for the next few years.  However, the RBA may feel less compelled to act with global inflation trends low and doubts that a rate cut now will do much good anyway.  The domestic economy is tracking close to trend at this time with some positive evidence in business surveys. Given the risks to the outlook the RBA may think it best to keep its limited space to ease conventional policy up its sleeve for now.  On the other hand, not cutting is likely to generate uncomfortable gains the AUD given the lackluster performance of the USD over the last week, further undermining the inflation outlook.

The RBNZ “<a href="http://rbnz.govt.nz/news/2016/07/reserve-bank-releases-economic-update" target="_blank">Economic Update</a>” released on its website today significantly expanded its views on the NZD exchange rate, suggesting that it will cut rates at its next policy meeting on 11 August in an attempt to offset or weaken the currency.It said today, “The trade-weighted exchange rate is 6 percent higher than assumed in the June Statement, and is notably higher than in the alternative scenario presented in that Statement.  The high exchange rate is adding further pressure to the dairy and…

The RBNZ “Economic Update” released on its website today significantly expanded its views on the NZD exchange rate, suggesting that it will cut rates at its next policy meeting on 11 August in an attempt to offset or weaken the currency.It said today, “The trade-weighted exchange rate is 6 percent higher than assumed in the June Statement, and is notably higher than in the alternative scenario presented in that Statement.  The high exchange rate is adding further pressure to the dairy and…

AmpGFX - RBNZ to Cut and 50bp Is Not Out of the Question

Australia

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

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AUD (USDAUD CURNCY)

Forex Focus: AUDGBP – Potential for Downard Reversal

Although it is widely expected that the Bank of England will cut rates by 25bps on Thursday for the first time in seven years (and possibly...

Naomi Fink

AmpGFX - RBA May Cut Reluctantly

We expect the RBA to cut this week, but are not convinced and agree with the 60% chance of 25bp cut priced into the market. A cut this week is...

Greg Gibbs

AmpGFX - RBNZ to Cut and 50bp Is Not Out of the Question

The RBNZ “Economic Update” released on its website today significantly expanded its views on the NZD exchange rate, suggesting that it will cut...

Greg Gibbs

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