HK Dollar outperforms the Greenback, bolstered by high loan rates and low market liquidity

133133

The Hong Kong Dollar outperformed the U.S. Dollar, propelling it into a record gain above 0.51% for March in 16 years.

The HK Dollar is perceived to climb further in the coming months as local borrowing rates are predicted to stay higher than that of the U.S. and a low interbank liquidity pool in Honk Kong.

Despite two rate cuts in March, Hong Kong’s tight liquidity kept the local currency on the stronger end of its trading band at 7.75. The rally has also been supported by an increasing demand by banks for the HK Dollar amid a rush ahead of quarter-end regulatory checks. The currency has been further helped by net local stocks bought by Mainland investors in a span of 20 days.      

Speculation suggests that a shortage of U.S. Dollars could further bolster the H.K. Dollar as a proxy.

The performance of the H.K. Dollar follows a massive global sell-off of most currencies as the effects of the coronavirus continue to disrupt economic growth around the world. It is observed as the second-best performance following the Bulgarian Lev in February.  

The information and recommendations contained in this analytical document are published strictly for information purposes and are not considered as an offer to buy or sell the trading tools mentioned above and are not intended to motivate to perform certain transactions
Something went wrong
Message: