HKD

Re: HKD

Postby winston » Tue Aug 08, 2017 10:47 am

The Hong Kong dollar has been struggling, with the currency falling to an 18-month low against the U.S. dollar to which it is pegged in a tight range.

The South China Morning Post has taken a look at what is troubling the HKD:

The Hong Kong dollar has been the worst performer among Asia’s 11-most traded currencies in the past month, according to Bloomberg data.

Under the linked exchange rate system, the Hong Kong Monetary Authority (HKMA) is obliged to prevent the currency from breaching either side of a trading band between 7.75 and 7.85.

In the current situation, it would sell US dollars and buy Hong Kong dollars to reduce interbank liquidity and raise Hong Kong dollar rates in order to curb depreciation pressure.

Historically however, the HKMA doesn’t wait for the currency to reach the 7.85 lower limit of the trading band before defending the peg, and may prefer intervening in currency markets pre-emptively to avoid panic among financial investors.

Source: SCMP
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Re: HKD

Postby winston » Fri Sep 08, 2017 8:02 am

Hong Kong's foreign currency reserve assets rose to US$413.7 billion (HK$3.22 trillion) at the end of August from US$413.3 billion at the end of July, said the Hong Kong Monetary Authority.

Source: The Standard
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Re: HKD

Postby winston » Fri Sep 29, 2017 10:04 am

Hong Kong dollar set for biggest monthly advance in 18 months as central bank drains funds

In a pre-emptive move ahead of expected US rate rise, analysts are betting Hong Kong Monetary Authority to continue withdrawing liquidity from the banking system to ensure higher HK dollar interest rates

Source: SCMP

http://www.scmp.com/business/money/mark ... advance-18
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Re: HKD

Postby behappyalways » Mon Apr 16, 2018 6:48 pm

Hong Kong Plows $1.7 Billion Into Defending Currency to Little Effect
https://www.bloomberg.com/news/articles ... tle-effect
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Re: HKD

Postby winston » Tue Apr 17, 2018 8:18 am

vested

Chart of the day: Currency woes cloud Hong Kong stocks

by Zhang Shidong

The persistent weakness in the Hong Kong dollar has dealt a blow to sentiment in the city’s stock market.

Concerns are growing among investors over tightening liquidity after the intervention by the Hong Kong Monetary Authority seems to have failed to check the currency’s depreciation against the US dollar, offsetting optimism about continued earnings growth and relatively low valuations.

The city’s de facto central bank has bought HK$13.25 billion (US$1.69 billion) in Hong Kong dollars over the past three sessions as the currency hit the lower end of its trading range at 7.85 per greenback, a level that has not been touched since 2005.

Even as Hong Kong stocks are now almost a fifth cheaper than their A-share counterparts, based on a gauge tracking the price gap between the two markets, that is still not enough to lure mainland traders.

The Stock Connect scheme yesterday saw net sales of the city’s equities for the third consecutive day.

Source: SCMP

http://www.scmp.com/business/markets/ar ... ong-stocks
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Re: HKD

Postby winston » Thu Apr 19, 2018 8:03 pm

Why Hong Kong’s Central Bank Intervened and Should We Worry?

In the first week alone of intervention, the Hong Kong Monetary Authority blew $6.5 billion of reserves.

The central bank had $440 billion of foreign reserves as of end-March (seven times the city’s money in circulation), so in its first week used up just 1.5 percent of the total.


Source: Bloomberg

https://www.bloomberg.com/news/articles ... -quicktake
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Re: HKD

Postby winston » Wed May 16, 2018 1:40 pm

Hong Kong Steps In to Defend Its Currency Peg Again

Hong Kong stepped in to defend its currency peg for the first time in almost a month.

The Hong Kong Monetary Authority mopped up HK$1.57 billion ($200 million) of local dollars overnight after the currency fell to the weak end of its trading band.

That adds to the $6.5 billion the de-facto central spent on intervention in April.

Source: Bloomberg

https://www.bloomberg.com/news/articles ... ar-weakens
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Re: HKD

Postby winston » Wed Jul 11, 2018 6:56 am

How the US-China trade war and Hong Kong’s currency peg could combine to create the perfect storm

Neal Kimberley says the Hong Kong dollar’s peg to the greenback means the monetary authority might have to raise interest rates just when the city needs safe harbour from the US-China trade war

Source: SCMP

https://www.scmp.com/comment/insight-op ... rrency-peg
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Re: HKD

Postby behappyalways » Wed Aug 15, 2018 2:11 pm

Hong Kong Intervenes to Defend Currency Peg for First Time Since May
https://www.bloomberg.com/news/articles ... -since-may
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Re: HKD

Postby winston » Sun Sep 23, 2018 8:59 am

Hong Kong dollar posts biggest increase against US dollar in 15 years, after China introduces plan to sell bills in city

Analysts said the introduction of sales of bills appeared to be an effort by the Chinese central bank to drain yuan-denominated liquidity and to help put a floor under the yuan exchange rate in the offshore market.

The announcement led to tightened liquidity in the Hong Kong banking system, because of “massive liquidation” by traders who were previously selling the Hong Kong dollar and buying the US dollar.


Liquidity at Hong Kong banks is likely to remain tight for the foreseeable future, until the PBOC’s intentions are clear, which would bring the soaring real estate prices in Hong Kong closer to a tipping point given the highly leveraged nature of the city’s property market.

The PBOC will probably continue taping and draining the Hong Kong money markets and pushing rates, which is an ominous sign for property markets”.


Source: SCMP

https://www.scmp.com/business/banking-f ... -us-dollar
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