A Hong Kong-dollar drop to the weak end of the tire can be short-lived | Einsmark news

(Bloomberg) – The Hong Kong -Dollar is expected to spend a shorter time under pressure than recent weaknesses, thanks to predictions for a softer greenback and seasonal factors. The city’s currency slides closer and closer to the weak end of its fixed trading range, as low borrowing costs encourage carrying ambiguity where investors lend it to buy the US dollar and set the interest rate difference of almost record. A violation of the 7.85 per Greenback threshold would lead the Monetary Authority in Hong Kong to sell US dollars to protect its currencies. However, a sustained intervention is not necessary as the impact of President Donald Trump’s trade and fiscal policy on the Greenback weighs. The inflow of shares of mainland China and the seasonal demand for Hong Kong Dollars for corporate dividend payments will also captivate the currency and reduce pressure on the authorities to act, according to Carie Li, the global market strategist at DBS Bank Ltd. “The US dollar is weaker and the federal reserve is on the road to lower rates, this time the trade in trade will not be active,” Li said. “The Hong Kong dollar may not remain at 7.85 as long as 2022-2023.” The Hong Kong dollar hurled for a period of about seven months from May 2022 for the weak point of its 7.75-7.85 band, which touched the lead in various trading sessions. The following year, it did the same from February to May, as the US rate increased the US-Hong Kong yield gap and made it attractive in the same way to buy the Greenback. The trigger for the recent attack on weakness in the city’s currency was ironically his strength amid an exodus of US assets, which forced the HKMA to sell an unprecedented amount of Hong Kong dollars last month. But the flood of liquidity also dragged borrowing costs and pushed the currency from one end of the tire to another in the fastest pace in four decades. The local dollar may soon affect the rand of the series, but expectations for the weakness of the US currency will keep it volatile, according to Stephen Chiu, Chief Asia FX and the interest rate at Bloomberg Intelligence. “Wear -Ambags will eventually lift the Hong Kong -Dollar to 7.85 lifting before the end of June,” he said. “The new norm is that the Hong Kong Dollar can swing more frequently within 7.75 to 7.85 trading series.” Wall Street banks reinforce their calls that the US currency will weaken further, thanks to a combination of interest rate cuts, the slowdown of economic growth and Trump’s trade and tax policies. A Bloomberg meter of the Greenback has been trading the worst since 2023. The extent of the HKMA’s intervention and the reluctance of aggravating the excess cash it pumped into the market indicates that it can help the priority to revive the city’s economy by keeping the borrowing costs low. If it wanted to push back the clumsy bets against the local dollar, it could again push borrowing costs higher by issuing accounts. “If Hong Kong Interbank offers the rates, longer low and banks can give the lower financing costs to the real economy, it can help Hong Kong’s economy by stimulating the demand and financing activities,” says Gary NG, senior economist at Natixis in Hong Kong. “For now, the HKMA looks happy with low interest rates.” -With help from Masaki Kondo. More stories like these are available on Bloomberg.com © 2025 Bloomberg LP