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USDHKD peg under pressure

  1. #1

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    USDHKD peg under pressure

    Lots of talk in the last few months about pressure on the USDHKD peg, any prospect of a change of range?

    eg. BBG last month: https://www.bloomberg.com/news/artic...rrency-defense


  2. #2

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    Quote Originally Posted by GentleGeorge
    Lots of talk in the last few months about pressure on the USDHKD peg, any prospect of a change of range?

    eg. BBG last month: https://www.bloomberg.com/news/artic...rrency-defense
    I think that article answers your question

  3. #3

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    Quote Originally Posted by hullexile
    I think that article answers your question
    Right well clearly it's one perspective, but there are many others out there, eg Kyle Bass who actually makes/loses money on this, unlike a news agency: https://www.wsj.com/articles/hedge-f...mb-11556185488
    Last edited by GentleGeorge; 28-04-2019 at 10:38 AM. Reason: Wrong URL

  4. #4

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    Quote Originally Posted by GentleGeorge
    Right well clearly it's one perspective, but there are many others out there, eg Kyle Bass who actually makes/loses money on this, unlike a news agency: https://www.wsj.com/articles/hedge-f...mb-11556185488
    Given the reserves I can't see the peg changing any time soon. You never know what could happen but highly unlikely IMO.
    traineeinvestor likes this.

  5. #5

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    The peg has been under pressure (in both directions) at various times since I arrived in Hong Kong in 1992 (and no doubt before then as well), most noticeably during the Asian financial crisis when people were queuing outside banks to break deposits so they could convert money out of HKD and SARS.

    Today, Hong Kong's reserves are even bigger than they were during the Asian financial crisis, SARS or the GFC, the HK economy is doing well and, based on the HKMA data, Hong Kong depositors have a much higher percentage of their assets denominated in non-HKD than they did during any of those past crisis. If the peg didn't break when every wannabe George Soros was shorting the HKD, I fail to see why it would break now when HK's economy is so strong.

    I don't expect it to last forever, but won't be speculating on its demise anytime soon.

    GentleGeorge and Golem like this.

  6. #6

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    Quote Originally Posted by traineeinvestor
    If the peg didn't break when every wannabe George Soros was shorting the HKD
    Or as a matter of fact George Soros himself in the late 90s if you recall. Failed miserably.
    Boring Newsletter.
    shri and MandM! like this.

  7. #7

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    Quote Originally Posted by jrkob
    Or as a matter of fact George Soros himself in the late 90s if you recall. Failed miserably.
    Boring Newsletter.
    And it was his first newsletter for three years. Another hedge fund that called things right once in the past and will try and live on that forever.

  8. #8

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    I remember the fallout of that . . . The Thai Baht was so battered I stayed at the old Intercontinental Hotel at Siam Square for $35us/night.


  9. #9

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    The Lantau thing will eat up the gov. surplus, cost will explode and shovelled across the border.


  10. #10

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    The difference between now and 1997 is the amount of mainland assets washed and parked in HK, the risk to the peg is any gov move to try and bring these back to the mainland which sparks contagion as people try to get them further away from Chinas reach (such as into USD assets)

    Heavy falls in stocks or property in HK also a risk


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