|Day's Range||7.808 - 7.819|
|52 Week Range||7.7825 - 7.8555|
Borrowing costs in Hong Kong have risen to the highest level since the 2008 financial crisis, pushing the territory’s currency to a two-year high. In a turnround from a marked period of weakness at the end of May, the Hong Kong dollar has climbed to the stronger end of the tight range in which it is managed against the US dollar, hitting HK$7.7824 on Thursday and sticking close to that point to round off the week. The one-month Hong Kong interbank offered rate (Hibor) has climbed to almost 3 per cent, the highest it has been above the equivalent US dollar rate since 2008.
(Bloomberg) -- The Hong Kong dollar advanced to its strongest since June 2017 as tight liquidity in the city keeps borrowing costs elevated.The currency rose as much as 0.19% to 7.7827 versus the greenback Thursday, days after it started trading in the strong half of its band for the first time since September. The local one-month interbank rate rose 29 basis points to 2.99% -- the highest in more than decade -- while the overnight Hibor jumped 84 basis points to 3.14%.Local money rates are surging as companies hoard cash to pay for dividends and large share sales lock up funds, outstripping the income a trader can expect on U.S. dollars. That’s undermining a once-popular trade to sell the Hong Kong dollar and buy the greenback that had pushed the city’s currency to the weak end of its trading band only months ago. The tighter liquidity has also coincided with recent demonstrations in Hong Kong.“Hong Kong dollar movement comes with liquidity tightness,” said Frances Cheung, head of Asia macro strategy at Westpac Banking Corp. The liquidity situation will persist until after the second large share offering, she added.The Asia-Pacific arm of Anheuser-Busch InBev this week started preparing for a listing that could raise as much as $9.8 billion, while Alibaba Group Holding Ltd. is said to have filed for a Hong Kong share offering that could raise $20 billion.The Hong Kong Monetary Authority spent HK$22.1 billion ($2.8 billion) in March to defend the currency’s peg. The peg means Kong Kong’s de facto central bank effectively imports U.S. monetary policy.The Hong Kong dollar pared the gain to 0.10% at 7.7896 versus the greenback as of 5:27 p.m. in the city. To contact the reporter on this story: Livia Yap in Singapore at email@example.comTo contact the editors responsible for this story: Sofia Horta e Costa at firstname.lastname@example.org, Philip Glamann, Will DaviesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The currency strengthened 0.1 per cent to HK$7.7891 against the greenback, its highest intraday level since May 2017. Hong Kong’s dollar has also benefited from broad US dollar weakness after the US Federal Reserve signalled a more dovish outlook last month, leading to a more than 1 per cent fall in the dollar index, which measures the greenback against a basket of international peers.
(Bloomberg) -- Hong Kong’s dollar punched into the strong half of its trading band for the first time since September, riding on momentum provided by elevated borrowing costs in the city.The currency climbed as much as 0.19% to 7.7987 a dollar on Tuesday, crossing the 7.8 threshold. Local interbank rates remain near a decade high, outstripping the income a trader can expect on U.S. dollars. That’s undermining a carry trade -- sell Hong Kong dollars, buy greenbacks -- that had been profitable for years.The tight liquidity is coinciding with dramatic street protests, just like last month, when the surge in borrowing costs suddenly accelerated. But market watchers see other reasons for the trend: companies are hoarding cash to pay quarterly dividends and at least two large share sales may lock up funds.“These tightening events will keep market players cautious and prompt them to continue hoarding cash,” said Carie Li, an economist at OCBC Wing Hang Bank Ltd.Rates are likely to remain elevated in July, Li said. By contrast, U.S. interest rates are dropping as the Federal Reserve prepares to ease monetary policy.Li said one- and three-month interbank lending rates, known as Hibor, are likely to stay above 2% in July. One-month Hong Kong dollar Hibor was at 2.49% on Tuesday and the three-month rate was 2.44%, dipping slightly from last week. Hong Kong’s financial markets were shut for a holiday Monday.The Asia-Pacific arm of Anheuser-Busch InBev is offering shares in a proposed Hong Kong listing that could raise as much as $9.8 billion. Alibaba Group Holding Ltd. is also said to have filed for a share sale that could raise as much as $20 billion -- which would make it the financial hub’s biggest since 2010. This squeezes liquidity as investors set aside cash for a chance to own a piece of the world’s biggest brewer or China’s largest company.The Hong Kong dollar carry trade was a steady winner for years as investors borrowed the currency cheaply to invest in higher-yielding American assets. It became less of a sure thing after the Hong Kong Monetary Authority started buying the local dollar to defend the peg from April 2018.March: What’s Pulling at the Hong Kong Dollar’s Peg: QuickTakeThe city’s aggregate balance now stands at just HK$56 billion, down from HK$180 billion before the HKMA began intervening. The HKMA, which effectively imports U.S. monetary policy, said in June that a higher Hibor and a stronger local dollar are “consistent” with the currency peg system, though uncertainty over the Fed’s policy was increasing.Eddie Cheung, an emerging-market strategist at Credit Agricole SA in Hong Kong, says the currency’s strength won’t last.“The liquidity will likely come back in July and August as seasonal factors wane, though large IPOs may trigger temporary spikes in Hibor,” he said. “It’s challenging to see a near term driver for strong inflows into the local equity market."\--With assistance from Tian Chen and Philip Glamann.To contact Bloomberg News staff for this story: Claire Che in Beijing at email@example.comTo contact the editors responsible for this story: Sofia Horta e Costa at firstname.lastname@example.org, Will DaviesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Stablecoins issuer TrustToken has launched yet another product - this time pegged to the Hong Kong dollar (HKD), the firm announced Tuesday.The post TrustToken rolls out its first Asian offering with Hong Kong dollar-backed stablecoin appeared first on The Block.
Hedge-fund manager Kyle Bass teams up with former Trump administration adviser Steve Bannon to “raise awareness” about an economic war between the U.S. and China, that they say is financed by Wall Street
The Hong Kong Monetary Authority (HKMA) stepped into the currency market again on Saturday in London and U.S. trading hours, buying HK$1.51 billion in Hong Kong dollars as the local currency repeatedly hit the lower end of its allowable trading band. The latest intervention will reduce the aggregate balance - the sum of balances on clearing accounts maintained by banks with the HKMA - to HK$74.8 billion on March 12, according to Reuters data. HKMA announced the intervention mid-Saturday.
Excess cash in Hong Kong's banking system has caused the local dollar to weaken so far in 2019, and traders expect the pegged currency will soon test the lower end of its tight band against the U.S. dollar. The Hong Kong dollar has fallen more than half a percent since early December, when it was trading close to the middle of its 7.75-7.85 band against the U.S. dollar. One-month inter-bank rates(HIBOR) have fallen 139 basis points since mid-December, mimicking a drop in U.S. yields as expectations rose for the Federal Reserve to slow its pace of monetary tightening.
Hong Kong-based money transfer platform Bitspark has launched what is reportedly the first stablecoin pegged to the Hong Kong dollar (HKD), local tech and finance news outlet Fintech Hong Kong reports Jan. 29. “Until now, US Dollar stablecoins have dominated the market but there are other national currencies in the world, like the Hong Kong Dollar,” the publication quotes CEO George Harrap as saying.
A period of weakness for Hong Kong's dollar may be coming to an end. The tightly controlled currency is showing signs of strength on the prospect of higher local interest rates.
The Hong Kong dollar experienced a sudden, sharp spike on Friday, pulling it off the weak end of its narrow trading band where it had been stuck at for six months. Expectations of a rise in bank lending rates and tightness in cash supplies appeared to cause the Hong Kong currency to climb to 7.8244 to the U.S. dollar, its highest level since late February. Since March, it had stayed near 7.85, the lower end of the Hong Kong Monetary Authority's managed trading band.
Emerging markets extended their recovery on Friday, as what looked set to be a marquee week for South Africa’s rand and the best day for Chinese stocks in over two years helped sweep away some of the recent gloom. The day's surprise came from the closely-controlled Hong Kong dollar which saw its biggest spike since 2003 overnight and a frenzy of activity options market in the process. Traders couldn't entirely explain the move, although some pointed to a rise in local money market rates as evidence that domestic banks might raise their lending rates next week, in reaction to another possible rate rise by the U.S. Federal Reserve.
The Hong Kong dollar advanced about 0.2 percent against the dollar in early Friday trade, hitting its highest levels since late February. It rose to as high as 7.8244 to the U.S. dollar, and last traded ...
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