USD/HKD Outlook:
Bullish, as the rate is above its recent average and approaching recent highs, buoyed by the outlook for U.S. economic data.
Key drivers:
- Rate gap: The Federal Reserve's decision to hold interest rates steady has made the U.S. Dollar less attractive compared to the Hong Kong Dollar's stability.
- Risk/commodities: Ongoing demand for USD due to positioning ahead of important retail sales data could bolster the dollar, impacting the USD/HKD rate.
- One macro factor: Concerns over U.S. labor market strength may also affect demand for the dollar, especially as traders await key employment figures.
Range:
Expect the USD/HKD to hold within its recent range, as it trades near the upper limit, with potential for slight fluctuations.
What could change it:
- Upside risk: Strong retail sales data could lift the USD higher against the HKD.
- Downside risk: Renewed geopolitical tensions may negatively impact USD demand, leading to a decline.
