HKD forecasts are influenced by three factors; the coronavirus impact, changes in the delta between interest rates in the US and the rest of the world (as HKD is pegged to USD) and also the trade war between China and the US.
HKD experienced an overall downward turn against the USD in September but traded strongly against other majors due to a market risk-off sentiment which pushed the USD upwards.
Key events to watch for HKD in October will be US employment data, the unfolding of the Evergrande Group Debt crisis, and the recovery of the crypto sector.
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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 in 2020, the HKMA intervened in the market by selling more than HK$50 billion because of high demand for the Hong Kong dollars from demand due to several large IPOs on the Hong Kong Stock Exchange, including JD.com and Tencent.
Since April 2020, authorities have intervened multiple times to prevent the currency from strengthening past its permitted trading maximum with the U.S. dollar USD/HKD = 7.75, more interventions are to be expected if the Hong Kong dollar continues to hit the strong end of its trading band.
AUD/HKD has risen back to the 5.7 level since late September mainly due to AUD strength as Australia profits from energy prices hikes.
The Aussie dollar in 2021 has had a long slide down against the HK dollar and remains below its 90-day average and well down from the highs above 6 earlier in the year.
You can also read our full Foreign Exchange Guide to Hong Kong.
Disclaimer: Please note any provider recommendations, currency forecasts or any opinions of our authors should not be taken as a reference to buy or sell any financial product.