Spot USD/HKD Dips Supported, US-HK Rate Differentials Starting To Stabilize

After making fresh highs in late NY trade on Wednesday (near 7.8480), USD/HKD has seen more two-way price action today. The pair pulled back towards 7.8440, before settling back closer to 7.8460 in recent dealings. Spot dips sub 7.8440 have generally been supported in recent sessions.

• Hibor 1 month fixed lower today, back under 3.72%, we did fix slightly higher yesterday (3.76%). The 3 month was also fixed lower, 4.45%, versus 4.48% yesterday.
• US-HK short end yield differentials have started to stabilize though, with US 3 month edging down this past week, weighed by weaker US data outcomes.
• The 1 month risk reversal is steady at -0.37. 12 month USD/HKD outright remains under 7.7800, with moves above this level generally sold by the market. The 6 month sits back closer to 7.8000, away from recent highs near 7.8050.
• On the data front, July retail sales print later, while July money supply and the budget balance are also due today.