Outlook
The HKD remains anchored to the USD via the currency board, with the HKMA actively defending the peg. After mid-2025 pressures and notable interventions, the currency is expected to stay within the established ranges, with occasional volatility driven by US rate expectations, global risk sentiment, and Mainland capital flows. Near-term moves in major pairs are likely to stay within recent narrow or moderate ranges as policy actions cushion dislocations.
Key drivers
- HKMA interventions defend the peg, including a large HK$6.4 billion purchase on August 4, 2025, and balance-sheet management to support HKD stability.
- Past pressure in mid-2025 saw the HKD approach the weak-side band, prompting USD selling and HKD buying to curb downside pressures and shrink liquidity in the banking system.
- Interbank rates rose on Mainland demand in August 2025, narrowing the USD/HKD rate differential and supporting HKD strength within the peg.
- Global volatility, including US tariff signals and shifting capital flows, tests the peg and requires ongoing corrective actions.
- Recent price data show HKD pairs moving within defined ranges, reinforcing a track record of range-bound behavior under a stable peg.
Range
HKD/USD: 0.1279–0.1287 (0.6% range)
HKD/EUR: 0.1065–0.1116 (4.8% range)
HKD/GBP: 0.092640–0.098365 (6.2% range)
HKD/JPY: 19.52–20.40 (4.5% range)
What could change it
- A surprise shift in HKMA policy or liquidity support for the peg, altering the balance the authority seeks to maintain.
- A sustained move in US rates or dollar strength/weakness that shifts USD/HKD flows beyond current expectations.
- Large shifts in Mainland capital inflows or property-market dynamics affecting demand for HKD.
- Significant global risk events or tariff developments that alter risk appetite and currency carry trades.
- Domestic Hong Kong macro surprises (growth, inflation, or external demand) that shift rate and policy expectations.
