The Hong Kong Monetary Authority sold its currency for the second time this week to defend a 24- year-old fixed exchange rate, as a record stock rally increased pressure for appreciation.
The city's de facto central bank sold HK$775 million ($100 million) today after the Hong Kong dollar touched HK$7.75 per dollar, the top of its permitted trading range. The HKMA sold the same amount on Oct. 23, the first time it had intervened in the currency market in more than two years.
Sean's take on it:
Hong Kong is supporting its U.S. dollar pegged band once again. They are committed to it.
While it will take some time for this ship to turn, as long as they defend the bottom of USD/HKD, then it's almost a guaranteed winner. While this may not be the fastest mover, for someone who wants a low risk, rising currency over time (and to get away from the falling dollar) this could be it.
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