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Is the peg safe?

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  1. #1

    Join Date
    Oct 2018
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    487

    Is the peg safe?

    What do you reckon? I can see a lot of fear in Hong Kong right now. Apparently the US will introduce some sanctions very soon. Is the peg safe? Can the HK government afford to defend it?

    hannah01 likes this.

  2. #2

    Join Date
    Jun 2018
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    The government can definitely afford to defend it. Any break would be a political decision, and with the enormous disruption that would cause I very much doubt it is on the agenda.

    traineeinvestor and Coolboy like this.

  3. #3

    Join Date
    May 2020
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    227
    Quote Originally Posted by john_1122:
    What do you reckon? I can see a lot of fear in Hong Kong right now. Apparently the US will introduce some sanctions very soon. Is the peg safe? Can the HK government afford to defend it?
    It is safe. Unless HKMA is lying to us about how much USD is in the foreign currency reserve (some speculate that China is eyeing to take them but I don't see how) the peg should be stable.
    traineeinvestor likes this.

  4. #4

    Join Date
    Jun 2015
    Posts
    504

    thought it was "is the pig safe"

    rkenia852 likes this.

  5. #5

    Join Date
    Feb 2019
    Posts
    2,662
    Quote Originally Posted by Tadashi:
    thought it was "is the pig safe"
    In China?

    Not likely!

  6. #6

    Join Date
    Apr 2019
    Location
    Singapore
    Posts
    401

    The peg should be safe but still converted a large chunk of my HKD to USD this morning.


  7. #7

    Even if HK's reserves proved inadequate, betting against the HKD is also a punt on China standing aside and allowing the peg to break.


  8. #8

    Join Date
    Nov 2005
    Location
    Cramped island
    Posts
    5,175

    the cost of betting now for a 1 year wager is at around 0.07 HKD, i.e. you long HKD at 7.82, so close to 1%, slightly higher than borrowing it at 1.2% and shorting it for USD yield of 0.3%...


  9. #9

    Join Date
    Mar 2010
    Posts
    1,113
    Quote Originally Posted by TheRoadAhead:
    The peg should be safe but still converted a large chunk of my HKD to USD this morning.
    I like people who stand behind their opinion. :-)
    Mr Chips, rkenia852 and aw451 like this.

  10. #10

    Join Date
    May 2019
    Location
    Hong Kong / London
    Posts
    7,723
    Quote Originally Posted by TheRoadAhead:
    The peg should be safe but still converted a large chunk of my HKD to USD this morning.
    You are far from the only one...
    https://twitter.com/stegersaurus/sta...577750530?s=21
    TheRoadAhead likes this.

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