The USD to HKD exchange rate is currently range-bound.
Key drivers include:
- The Federal Reserve is expected to implement multiple rate cuts by mid-2026, which could weaken the USD in the first half of the year.
- The stability of the HKD is backed by the Hong Kong Monetary Authority maintaining its interest rates, with forecasts suggesting minor fluctuations in the USD/HKD pair.
- Improving global growth may influence commodity prices, indirectly supporting the USD's volatility.
In the near term, analysts expect the USD/HKD to trade around current levels with slight variations as rates stabilize near 7.79.
Upward pressure could emerge if global economic growth exceeds expectations, while downward risks include the rapid implementation of U.S. rate cuts, leading to further depreciation of the USD.