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USD/HKD Makes Fresh Highs, Outright Forwards Drift Lower

HKD

USD/HKD spot dips remain supported, the pair last near 7.8425. In NY trade on Thursday the pair got to fresh highs at 7.8430, which is close to early June highs at 7.8440. Recent support points have been at 7.8380 yesterday and 7.8400 earlier today.

  • The skew on US-HK rate differentials remains to the upside, the 3 month spread at +94bps. 3 month Hibor fell back further to 4.70% yesterday.
  • The HKMA lent out HK$3.95bn to local banks via the discount window on Thursday, which is the largest amount since 2021.
  • In the USD/HKD outright forward space, the 12 month is still sub 7.7800, last at 7.7775, largely tracking sideways in recent dealings. 6 month is back near 7.8000, also showing waning upside momentum.
  • Late yesterday, July trade data showed export growth close to expectations, -9.1% y/y (forecast was -8.8%, prior -11.4%). Imports were slightly weaker though at -7.9% y/y (forecast -5.9%, prior -12.3%). Exports are well off early 2023 lows, but the recovery process is not V-shaped. The data calendar is now empty until the end of August.
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