Forecasts and predictions for the Hong Kong dollar change all the time, affected by news events and relative sentiment towards the HK economy. This continually updated article reviews HKD bank forecasts and popular cross-rate trends.
Scotiabank perhaps were just a little too early to admit defeat back in April when it said that USD, and therefore HKD, was likely to be “stronger for longer.” It had long held a bearish view on both currencies which has proved to be correct in the second half of 2020.
HSBC said in May to expect higher HKD values relative to the Australian dollar and New Zealand dollar, and against riskier emerging market currencies.
In May, HSBC warned against thinking that USD, and therefore HKD, had gotten too high. The bank highlighted the “desolation and destruction” (an exaggeration) facing other economies, and the lack of value-maintaining currency alternatives.
Earlier in the year the threat of proxy war between the US and Iran in Ira helped bring on gains in the Japanese yen and US dollar plus currencies pegged to the greenback such as the Hong Kong dollar.
The Hong Kong dollar has been pegged to the US dollar since 1983. Since 2005 the HKMA has kept the currency trading at a range between HK$ 7.75 and HK$7.85.
When HKD moves too close to either limit, the HKMA acts by either buying or selling the currency. So far in 2020, the HKMA has intervened in the market by selling more than HK$50 billion because of high demand for the Hong Kong dollarsfrom demand due to several large IPOs on the Hong Kong Stock Exchange, including JD.com and Tencent.
AUD/HKD forecasts are influenced by three factors; the coronavirus impact on and response by both economies, changes in the delta between interest rates in Australia and the US (as HKD is pegged to USD) and also the trade war between China and the US and increasingly Australia.
Read more about FX Broker and Bank analysts' predictions for AUD to HKD future trends in our blog article AUD to HKD Broker & Bank Forecasts.
As reported by Bloomberg, top advisers to President Donald Trump want the U.S. to undermine the Hong Kong dollar’s peg to the U.S. dollar as the administration considers options to punish China for recent moves to chip away at the former British colony’s political freedoms.
You can also read our full Foreign Exchange Guide to Hong Kong.