USD/HKD Outlook:
Likely to increase, as the rate is just above its recent average and at 90-day highs, driven by U.S. economic factors.
Key drivers:
• Rate gap: The Federal Reserve has kept interest rates steady, which supports the dollar against the Hong Kong dollar as the gap remains favorable.
• Risk/commodities: Recent increases in U.S. Treasury yields indicate a more attractive environment for dollar-denominated assets, enhancing the appeal of the USD.
• One macro factor: The ongoing geopolitical tensions affecting U.S. trade policies have led to fluctuations in the dollar, impacting its stability.
Range:
Expect the USD/HKD to hold its position within the recent 3-month range, with potential for slow upward drift.
What could change it:
• Upside risk: A stronger than expected performance in upcoming U.S. jobless claims data could boost the dollar further.
• Downside risk: Heightened global trade tensions could increase risk aversion, leading to a decrease in USD strength.
