Outlook
Outlook The HKD is expected to stay broadly anchored by ongoing HKMA support and the path of US monetary policy. Interventions have shown persistence, including the July 2025 purchase of nearly 4 billion HKD and the June 2025 weak-side Convertibility Undertaking (CU) trigger, where USD were sold to buy HKD as the peg edge was tested around 7.85 per USD. Near term moves will hinge on US rate expectations and cross-border flows, notably Southbound inflows.
Key drivers
Key drivers
- HKMA interventions to support HKD, including July 2025 near 4 billion HKD purchase, and the June 2025 weak-side Convertibility Undertaking (CU) trigger (explanation: the CU is a policy tool that can prompt currency sales to defend the peg when the HKD approaches the weak-side level).
- US Federal Reserve policy path and potential rate moves, which influence USD strength and HKD performance.
- Southbound Stock Connect inflows (August 2025) boosting HKD demand and supporting the peg.
- Cross-border capital flows and overall market liquidity, including global risk sentiment.
Range
HKD/USD: 0.1278–0.1287 (0.7% range), current 0.1279
HKD/EUR: 0.1065–0.1109 (4.1% range), current 0.1082
HKD/GBP: 0.092640–0.097244 (5.0% range), current 0.094324
HKD/JPY: 19.52–20.40 (4.5% range), current 19.97
What could change it
- Further HKMA actions or changes to the intervention framework, including any new triggers or thresholds
- A shift in the US rate path from the Federal Reserve (further cuts, pauses, or hikes) and associated USD moves
- Changes in Mainland policy or PBOC liquidity measures that affect HK liquidity
- Shifts in Southbound inflows or other cross-border capital flows altering HKD demand
- Global risk sentiment and liquidity conditions impacting carry and demand for the HKD peg
