Hong Kong dollar approaching the bottom of its permitted trading band. Is this time different?

Author: Eamonn Sheridan | Category: News

The currency peg for the HKD keeps USD/HKD in the range of 7.75 to 7.85. Higher is a weaker HKD.

The HKMA is obliged to intervene when the Hong Kong dollar hits 7.75 or 7.85 to keep the band intact.

During my years at ForexLive I have never failed to dismiss suggestions the HKD would weaken past 7.85. The currency band has been intact since 2005, with other pegged rates prior to that. 

Now for the but …. is this time different? The "chaotic situation" in HK will impact on its economy. But, its not that which will pressure then band enough I reckon, its the potential for some sort of intervention from mainland forces. This has the potential to change the game.

Dunno. Comments welcome. 

HKD back to 2008. I could dig up a longer teerm chart, but you get the ocitrure of how the band has held quite well from this:

currency peg for the HKD keeps USD/HKD in the range of 7.75 to 7.85.
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