HK Intervenes Again To Defend Peg As Dollar Up

- Aug 24, 2018-

The Hong Kong Monetary Authority bought HK$1.77 billion (US$225 million) during New York trading hours on Thursday, according to the de facto central bank’s page on Bloomberg. That came as the city’s currency touched the weak end of its permitted trading band at HK$7.85 for a third day. The aggregate balance will fall to HK$91 billion on Aug 27.

READ MORE: HKMA spends HK$13.03b in a week to defend HK dollar

China on Thursday filed a complaint with the World Trade Organization against US tariffs on Chinese goods worth US$16 billion under the Section 301 investigation, according to the Ministry of Commerce.  The Bloomberg Dollar Spot Index jumped the most in six weeks.

With the HKMA having resumed interventions last week, analysts are watching to see when efforts to defend the Hong Kong dollar will start driving up borrowing costs in the city. The Federal Reserve is widely expected to raise its benchmark lending rate next month, which could pave the path to the first prime rate hike in Hong Kong in at least a decade.

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