HKD/CNY Outlook:
The HKD/CNY rate is slightly weaker and likely to move sideways, currently trading below its recent average and near recent lows. This positioning points to limited momentum without clear direction.
Key drivers:
• Rate gap: The Hong Kong Monetary Authority's interventions have supported the HKD, while the People’s Bank of China has emphasized stability for the CNY.
• Risk/commodities: Recent fluctuations in oil prices have affected market confidence, impacting demand for both currencies differently.
• One macro factor: China's strong economic growth has been fueled by significant government stimulus, potentially bolstering the CNY's position.
Range:
The HKD/CNY is expected to hold within its recent range, as external pressures balance current trends.
What could change it:
• Upside risk: A substantial improvement in external economic conditions could boost HKD demand.
• Downside risk: Increased volatility in global markets might lead to further selling pressure on the HKD.
