The Hong Kong dollar (HKD) remains under pressure, currently trading near the upper limit of its peg against the US dollar at approximately 7.85, which influences the HKD's value against the British pound (GBP). As of late June 2025, the HKD has faced significant outflows driven by a wide interest rate differential between the US and Hong Kong, which currently stands at 4.4%. Analysts indicate that without a change in Federal Reserve policy or a shift in global sentiment, the HKD is likely to maintain a soft trajectory.
According to forecasts, the HKD to GBP exchange rate has recently reached 14-day lows around 0.094695, close to its three-month average. The pair has shown stability within a 5.1% range, and market experts suggest that the HKD's continued softness could keep it biased toward lower values against the GBP, particularly given the ongoing outflows and the appeal of carry trades.
Conversely, the GBP has experienced uplift following a narrow decision by the Bank of England (BoE) to cut interest rates by 25 basis points, which has affected market expectations for future rate cuts. The upward revision of inflation forecasts by the BoE has aided the pound's strength, although a lack of fresh UK data could restrict significant movement in the near term. Economic performance indicators such as GDP growth and inflation will remain critical in shaping investor confidence in the UK, thereby influencing the GBP's trajectory against currencies like the HKD.
Looking ahead, the HKD's strength will likely hinge on local economic recovery amid ongoing challenges, while the GBP's performance will continue to be dictated by domestic economic indicators and broader geopolitical factors. As such, individuals and businesses engaged in international transactions should monitor the evolving macroeconomic landscape and rate decisions from both the HKMA and BoE to effectively navigate foreign exchange exposures.
