Free Trial

Stock Flows Supporting HKD

HKD

USD/HKD lower on the session, last down 2 pips at 7.7516, on track for its 8th lower close out of the past 9 trading sessions. 12-month 25 delta risk reversals touched -0.165, the lowest since May 2019.

  • Stocks in Hong Kong continue to see record flows, the Hang Seng crossed the 30,000 barrier and now has eyes on the 2019 high at 30,280.12. MNI have noted previously that Tuesday's session saw record inflows into Hong Kong stocks via the Shanghai-Hong Kong stock connect while daily stock turnover in Hong Kong hit record levels. This wave of money is putting downward pressure on USD/HKD.
  • Keeping an eye on options though, activity has been most elevated in 7.85 USD calls when looking a year out. HKD 12-month forward points have dropped further into negative territory in January, after turning positive in December. 12-month forward points hit a low of -23.50 on Jan.15,last -20.50, which would take the pair below the HKMA's lower limit of 7.75, and suggests a spike in demand to hedge against appreciation in the currency.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.