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FXPRIMUS SPECIAL - Is the Hong Kong's dollar peg against the US dollar at risk?

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This is Stavros Tousios from FXPRIMUS headquarters in Cyprus and this is a special video coming from our investment research team. Over the past few days we have noticed that the Hong Kong Dollar has fallen to the weaker end of its permitted band, trading at 7.85 on three separate occasions! Pressure on the HK Dollar is tremendous as we speak as the foreign currency is pegged to the US Dollar at 7.8, with the top of its permitted band being the 7.85, the bottom being 7.75, a level reached in 2015, where the monetary authority last intervened. The weak-side of the trading band introduced back in 2005, defined as the weak-side convertibility undertaking (CU), had Hong Kong Monetary Authority buying 2.42 billion Hong Kong Dollar from the exchange market yesterday during the US session, and again, another 816 million as the interest rate gap between Dollar and the Hong Kong counterpart widened. With market participants looking at the situation with interest it is likely that activity will remain at increased levels as the interbank rates in Hong Kong soared 4.1 basis points for the day, the largest increase since November 29. According to analysts’ price could stay around the 7.85 per US Dollar for the rest of 2018 but since the Hong Kong Monetary Authority is obligated to defend the level and stands ready to fulfill any requests from banks to support the currency something big may be coming ahead that has a lot of commonalities with the 2015 Swiss Franc. I will be watching this pair and any relevant news very closely as opportunities may arise. FXPRIMUS is a leading online broker providing trading services for forex, commodities, metals, energies, stocks and indices. Serving traders in 200+ countries across 6 continents, FXPRIMUS offers award-winning trading conditions and order execution, multilingual 24/5 support and unrivalled fund safety measures, enabling clients to trade 120+ instruments, via advanced web and mobile trading platforms. Open your account today at www.fxprimus.com. Risk Warning: Trading on margin products involves a high level of risk.
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