FX.co ★ Hong Kong Dollar Nears 13-Month Low

The Hong Kong dollar has depreciated to approximately 7.83 per USD, marking its weakest point since late April 2024, primarily due to recent foreign exchange interventions. The currency is nearing the lower boundary of its 7.75–7.85 trading band as the Hong Kong Monetary Authority recently sold local currency to mitigate upward pressure. This intervention increased market liquidity and caused the one-month HIBOR to fall below 1% for the first time since 2022. The subsequent decline in borrowing costs has triggered bearish speculation and rekindled carry trades, with forward points across major durations approaching historical lows. As of now, the Hong Kong dollar has decreased nearly 1% in May, potentially setting up for its most significant monthly decline since 1983, the year it was first pegged to the U.S. dollar.