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USD/HKD Recovery Continues, Spot Back to Early July Levels

HKD

The USD/HKD recovery continues, the pair currently just below recent highs, last tracking near 7.8330. Dips sub 7.8300 have generally been support today and we are tracking higher for the 4th straight session. We are above all key EMAs now, with the 200-day back near 7.8300 potentially a support point.

  • Yield momentum remains skewed in the USDs favor. 3 month Hibor continues to edge down from recent highs, last at 5.02%, we were at 5.43% near the start of August.
  • Risk reversals are relatively steady, the 3 month edging away from recent highs, despite the further recovery in spot.
  • USD/HKD forward outrights continue to track higher, but remain laggards to the spot move. The 12month last near 7.7790, the 6 month just above 7.8000.
  • Tomorrow, we get July unemployment data. Elsewhere local developers are reportedly offering local homes at a price discount per SCMP (see this link). This comes high housing inventory for Hong Kong.

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