Business & Finance
Hong Kong Dollar Nears Weak End on Low Volatility, Cheap Rates
Key Points
Currencies Hong Kong Dollar Nears Weak End on Low Volatility, Cheap Rates The Hong Kong dollar is heading toward the weak end of its fixed trading range as multi-year low volatility and cheap borrowing costs make it easier for traders to short the currency against the greenback. One-year dollar/Hong Kong dollar implied volatility has dropped to its lowest since January 2022, according to data compiled by Bloomberg, partly due to a lack of rush for US dollars in the city at the start of the...
Currencies
Hong Kong Dollar Nears Weak End on Low Volatility, Cheap Rates
The Hong Kong dollar is heading toward the weak end of its fixed trading range as multi-year low volatility and cheap borrowing costs make it easier for traders to short the currency against the greenback.
One-year dollar/Hong Kong dollar implied volatility has dropped to its lowest since January 2022, according to data compiled by Bloomberg, partly due to a lack of rush for US dollars in the city at the start of the Iran war. Analysts see this calm as a conducive backdrop to short the local dollar against the higher-yielding greenback, a carry trade that’s nudging the local currency near the weak end of its 7.75-7.85 per dollar range.