Discussion in 'Forex' started by benwm, Jan 22, 2010.

  1. benwm


    Anyone seen the rise in USD.HKD from 7.75 to 7.77?
    Of course in most currencies that would be small but in HKD it is big!

    Somewhat of a head scratcher...the weakening in HKD seems to have begun as PBOC begun tightening policy, and yet at first glance I would have thought tightening in China would imply more likelihood of RMB appreciation in coming months and possible HKD appreciation...

    There is a school of thought that says HKD and RMB might be pegged themselves one day (say 1-to-1?)

    PBOC doesn't want hot money coming in to RMB right now so it is possible that the HKD rally is a curve ball to speculators to throw them off the scent before a surpise RMB appreciation. Or it could just be genuine outflows. I haven't seen any explanations that make sense yet. Even if HK and China in a property bubble would the currency get hit?..even when Japan's bubble burst in 1990 JPY was incredibly strong until 1995 Plaza Accord.

    Any ideas? Thanks in advance.
  2. benwm


    well, I was short USD.HKD and have bailed out. I don't know why HKD is weakening but something is up.