Outlook
The HKD remains effectively pegged to the USD, with the HKMA actively intervening when needed. Near term, the HKD is likely to stay within a narrow band around USD 0.1278 per HKD (roughly 7.82 HKD per USD). The key drivers are ongoing HKMA actions, US policy expectations, and cross-border inflows. A sustained move beyond recent ranges would require a material shift in US monetary policy or a renewed surge in capital flows via channels like Stock Connect.
Key drivers
- HKMA interventions to support HKD, including 2025 purchases and the June 2025 weak-side Convertibility Undertaking, with ongoing market vigilance.
- US Federal Reserve policy path, including potential rate cuts or changes in pace, influencing USD strength and HKD moves.
- Southbound Stock Connect inflows (August 2025: record net HK$35.9 billion) boosting demand for HKD.
- External risk sentiment and global liquidity conditions shaping capital flows into Hong Kong.
Range
HKD/USD is around 0.1278, near 90-day lows and just below its 3-month average, having traded in a stable 0.1278 to 0.1287 range (about 0.7%). HKD/EUR at 0.1086, just 0.5% below its 3-month average of 0.1092, with a stable 0.1065 to 0.1109 range (about 4.1% swing). HKD/GBP at 0.094719, just below its 3-month average, within a 0.092640 to 0.097244 range (about 5.0% swing). HKD/JPY at 19.93, near 14-day highs and just below its 3-month average, trading within 19.52 to 20.40 (about 4.5% swing).
What could change it
- Renewed HKMA action or changes to the Convertibility Undertaking, especially if the USD moves sharply against the HKD.
- A surprise shift in US monetary policy (faster or slower rate path) altering USD/HKD dynamics.
- Sustained or renewed cross-border inflows/outflows (e.g., Stock Connect) changing demand for HKD.
- Broad shifts in global risk appetite or liquidity that affect Hong Kong capital markets and FX flows.
