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USDHKD

USDHKD and the HKMA delimaNot my own idea but Kyle Bass points out 80% of the HKMA's "war chest" currency board reserves have been used maintaining the upper peg. Trumps trade war is putting extra pressure on this peg breaking. Last time we saw a peg break was the SNB Frac's +30% 1500+ pips in 5 minute appreciation. There are only three routes for them they can raise more money in the domestic economy, they can raise HKD interest rates, or they can break the peg back to a free float system like the SNB.
Long
by NervaTech
4
Hong Kong Dollar Strengthens on Rate SpikeThis is an excerpt from MACRO BRIEF: Hong Kong Dollar Strengthens on Rate Spike originally published March 10, 2019. The short-HKD trade is nearly consensus, which reminds me of the short-yuan trade a few years ago that was largely snuffed out by the PBOC. Problem here, though, is the HKMA's attempts to draw in HKD inflows have been superficial at best. Additionally, with China likely continuing using Hong Kong as a dollar ATM it is hard to estimate how long the strength would last. The 3.7 sigma move has pulled in quite a bit but still remains extended. 7-day ROC saw its largest spike since December when the HIBOR 1M and 3M futures converged. We'll continue to monitor the situation, but prolonged elevation of rates could be a problem considering that Hong Kong's economy is strongly interest rate sensitive with banking assets and domestic credit to public sector as a percentage of GDP at well over 200 percent. To access original charts and commentary on this blog post click here .
by TheMacroStrategist
USDHKD and its relationship to Emerging Markets vs. US EquitiesUSDHKD is a proxy for monetary "stuff" going on in China. China can stimulate when this peg is not being hit as most of their dollar funding seems to be running through Hong Kong. When the peg gets hit however, we see noticeable problems and effects around the world. We are now about to see the peg get re-hit once again, which will likely kick off another wave of unexpected monetary issues around the world similar to what we saw last April. We will likely see more emerging market underperformance once again relative to US equities if this is in fact indicative of what is going on in the shadows.
by GTStockmaster
[Signal] USDHKD: Low-Risk Opportunity Arises AgainUSDHKD Timeframe: 1D Direction: Short Confluences for Trade: - Pegged currency @ 7.85 - Stochastic Overbought momentum - Price action at Horizontal Resistance Trendline (Central Bank defends at this level) - The opportunity appears again similarly to our previous USDHKD trade; minimal risk involved) Suggested Trade: Entry @ Area of Interest 7.8450 - 7.8500 SL: 7.8572 TP1: 7.8350 TP2: 7.8210 RR: Approx. 2.72 (Depending on Entry Level) May the pips move in our favor! Good luck! :D *This trade suggestion is provided on an advisory basis. Any trade decisions made based on this suggestion is a personal decision and we are not responsible for any losses derived from it.
Short
by weekendanalyst
USDHKD (1D): Take Advantage of the PegUSDHKD Timeframe: 1D Direction: Short Confluences for Trade: - Pegged currency, strongly defended at 7.85 (Limited risk; any break above the 7.85 levels is gonna be a crisis issue) - Stochastic Overbought momentum - Not directly related but Double Top Resistance for the DXY, helps support the drop in USD strength Suggested Trade: Entry @ Area of Interest 7.8365 - 7.8499 SL: 7.8573 TP: 7.7935 RR: Approx. 2.91 (Depending on Entry Level) May the pips move in our favor! Good luck! :D *This trade suggestion is provided on an advisory basis. Any trade decisions made based on this suggestion is a personal decision and we are not responsible for any losses derived from it.
Short
by weekendanalyst