Trump-Induced Turbulence, Hong Kong dollars, interest rates

By Rae Wee and Jiaxing Li

Singapore / Hong Kong (Reuters) -us President Donald Trump’s incorrect policies have tried time and walks a currency pole that looks like an anchor for China and Asia.

Hong Kong Dollar, from one end of the narrow trading group to another in a month in a month.

Although the final variation is not seen as a threat to a four decade-year-old poles, the financial center has a sharp impact on interest rates by providing a difficult environment for enterprises and investors.

The stress of one of the most popular currency poles in the world emphasizes how much variability of the US dollars under the Trump violates the most stable corners of the market.

Interest rates in Hong Kong Hong Kong dollar – Hong Kong $ 7.75 to US dollars – the relatively stable Hong Kong dollar is tended to move along with the United States.

But during the last month, global investors have cooled the assets of the United States and entered the Mass capital Hong Kong because Washington entered the mass capital Hong Kong, entered the management Kong. Chinese investors also plow record amounts to the shares listed in Hong Kong.

“PACE and the speed of the flow was very surprising,” said Raymond Yeung, Anz’s chief economist for Great China.

Variability Hong Kong money organization (HKMA), Hong Kong dollar to intervene in the currency market for compulsory the city’s de facto Central Bank, opposed the strong end of the trade group.

This caused the steering expenditures to shorten the currency in Hong Kong, and drag it to the scattering of the disabled and drag it to 7.85, and drag it to the weak end of the group.

As the rates of Hong Kong fell, the space between the three-month rates and Benchmark in Hong Kong, hit the record based on LSEG data last week, last week. Similarly spread to other tenors.

Analysts say it is normal to see a random deviation in the random dollars between Hong Kong and the US dollar, but are worried about businesses and investors – especially for global trade and other uncertainty.

“If the gap is dramatically closed, then firms and households in Hong Kong may suffer from a large interest rate for financial stability,” said Anz’s Yeung.

Hong Kong officials are here to stay on Pegin and have some advantages to current low levels, despite increasing volatility.