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USD/HKD Falls to New Low Since Last Aug; HKD Carry Trade Returns
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USD/HKD has fallen to its lowest level of 7.811 since August 2025. As excessive liquidity in the banking system has stimulated carry trades involving the HKD, investors are borrowing HKD at low costs to invest in higher-yielding USD assets. The one-month HIBOR has dropped to its lowest level since last November and is expected to slide for the fifth consecutive month. Cindy Keung, Hong Kong economist at OCBC Bank, said the recent widening of the exchange rate gap between the HKD and USD has prompted the return of carry trades. While further weakening of the HKD cannot be ruled out, it is expected that USD/HKD will encounter some resistance around 7.82. AAStocks Financial News |
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