USD/HKD Spot Sub 7.7900 On Further Hibor Rises

Spot USD/HKD continues to trend lower. The pair was last near 7.7875, against earlier lows of 7.7861. We opened at 7.7928. Even as CNH has stabilized somewhat, HKD continues to enjoy yield support as Hibor rates climb further.

• The 1 month his a fresh 16yr year high today at 5.534%, (+15.5bps). The 3 month fixed at 5.71%, +6.6bps. The US-HK 3 month yield continues to track lower, last at -32bps, fresh lows back to Jan of this year.
• Seasonality in terms of cash demand and a low start starting point for the aggregate balance, are being cited as factors driving firmer yields.
• Early Dec 2022 lows were at 7.7617, which could be targeted if we breach 7.7800.
• The data calendar has Oct trade figures out later today. The market expects exports at -2.9% y/y (prior -5.3%). Arguably US data outcomes, particularly in relation to prices, will have a bigger influence on USD/HKD as we progress through this week.