The USD to HKD exchange rate currently exhibits a bearish bias.
Key drivers influencing this trend include the anticipated monetary easing by the Federal Reserve, which is expected to cut rates several times through mid-2026. This has stoked expectations for a weaker USD. Additionally, improving global economic growth and rising commodity prices could contribute to increased volatility in the USD. On the Hong Kong Dollar side, the stability of its monetary policy, with interest rates expected to remain unchanged, supports a more stable HKD.
Near-term trading is expected to hover around current levels, with slight fluctuations but predominantly stable compared to the recent average.
Upside risks include a potential surprise in the Fed's policy that could strengthen the USD. Conversely, a downside risk may arise from the ASEAN's plan to reduce reliance on the USD for cross-border transactions, potentially affecting its demand.