Latest news with #US-HongKong
Mint
4 days ago
- Business
- Mint
A Hong Kong Dollar Drop to Weak End of Band May be Short-Lived
(Bloomberg) -- The Hong Kong dollar is expected to spend a shorter amount of time under pressure than recent bouts of weakness, thanks to forecasts for a softer greenback and seasonal factors. The city's currency is slipping ever closer to the weak end of its fixed trading range, as low borrowing costs encourage carry trades where investors borrow it to buy the US dollar and pocket the near-record interest-rate difference. A breach of the 7.85 per greenback threshold would prompt the Hong Kong Monetary Authority to sell US dollars to protect its currency peg. However, a sustained intervention may not be required as the impact of President Donald Trump's trade and fiscal policies weigh on the greenback. Equity inflows from mainland China and seasonal demand for Hong Kong dollars for corporate dividend payments will also buoy the currency and reduce the pressure on authorities to act, according to Carie Li, global market strategist at DBS Bank Ltd. 'The US dollar is weaker and the Federal Reserve is on the way to cut rates, this time the carry trade will not be so active,' Li said. 'The Hong Kong dollar may not stay at 7.85 for as long as it did in 2022-2023.' The Hong Kong dollar hovered around the weak end of its 7.75-7.85 band for a period of about seven months from May 2022, touching the edge in several trading sessions. The following year it did the same from February to May as US rate hikes widened the US-Hong Kong yield gap and made it similarly appealing to buy the greenback. The trigger for the recent bout of weakness in the city's currency was ironically its strength amid an exodus from US assets, which forced the HKMA to sell an unprecedented amount of Hong Kong dollars last month. But the flood of liquidity also dragged down borrowing costs, pushing the currency from one end of the band to the other at the fastest pace in four decades. The local dollar may soon touch the edge of the range but expectations for US currency weakness will keep it volatile, according to Stephen Chiu, chief Asia FX and rates strategist at Bloomberg Intelligence. 'Carry trades will eventually lift the Hong Kong dollar to 7.85 likely before the end of June,' he said. 'The new norm will be for the Hong Kong dollar to swing more frequently within 7.75 to 7.85 trading range.' Wall Street banks are reinforcing their calls that the US currency will weaken further, thanks to a combination of interest-rate cuts, slowing economic growth and Trump's trade and tax policies. A Bloomberg gauge of the greenback is trading around its weakest since 2023. The scale of the HKMA's intervention and its reluctance to mop up the excess cash it pumped into the market, suggests to some its priority is to help revive the city's economy by keeping borrowing costs low. If it wanted to push back on the bearish bets against the local dollar it could push borrowing costs higher again by issuing bills. 'If Hong Kong Interbank Offered Rates stay low for longer and banks are able to pass the lower funding cost to the real economy, it can help the Hong Kong economy by stimulating demand and financing activities,' said Gary Ng, senior economist at Natixis in Hong Kong. 'For now, the HKMA seems happy with low interest rates.' --With assistance from Masaki Kondo. More stories like this are available on
The Independent
04-03-2025
- Politics
- The Independent
Keir Starmer urged to push for Jimmy Lai's release as marathon cross-examination finally ends
Prime minister Keir Starmer has been urged to press for British citizen Jimmy Lai's immediate release over his failing health inside a Hong Kong prison. The 77-year-old pro-democracy campaigner and founder of the now-shuttered Apple Daily newspaper on Monday denied allegations of requesting the US to sanction China for imposing a security law as prosecutors wrapped up their 24-day-long cross examination. The media tycoon is facing the prospect of life in prison if found guilty of sedition and collusion with foreign powers under the city's national security law. He has pleaded not guilty to the charges. His son, Sebastien Lai, told Sky News that he has written to Sir Keir asking for a meeting with the prime minister over his father's condition. Mr Lai suffers from diabetes and has lost a significant amount of weight, his son said, adding that his father has been kept in solitary confinement since 2021. Mr Lai has been denied independent medical care and is allowed out of his cell for 50 minutes a day, according to his lawyers and media reports. Although Sir Keir has previously raised Mr Lai's case with Chinese president Xi Jinping, Sebastien Lai claims the prime minister needs to urgently push for his father's release. "He's still strong mentally and spiritually," he told the broadcaster. "But he's in the body of a 77-year-old, and it's just one of those situations where we can't wait." Sebastien Lai argued that his father's case was a "litmus test" for the British government and a meeting with Mr Keir would show that No 10 was treating the media tycoon's case with "utmost priority". "It would take less than three hours for them to put him on a plane and send him back home to the UK," he said. "So if they're not even willing to do something like this in such a clear-cut case, where he might very well die in jail, then what else can we expect from them?" he asked. On the 50th day of the marathon trial, the prosecution in Hong Kong flagged an exchange between Lai and his aide Mark Simon a day after Donald Trump during his first presidency abolished Hong Kong's special status in 2020. In that exchange on Signal app, Mr Simon relayed a question from Mary Kissel, a senior adviser to then US secretary of state Mike Pompeo, to understand Mr Lai's position on US-Hong Kong relations. Mr Lai told the court that his reply revealed his thinking at that time and denied the suggestion that he wished the US suspension of Hong Kong's special status would last, Hong Kong Free Press reported. While he admitted that Mr Simon would relay the message to the White House, but argued it didn't constitute a direct request for Washington to impose sanctions. 'I was asked a question, and I answered the question,' he told the court. In his reply to Mr Simon, the defendant had written: "I said that it's not necessary to revoke the special status of HK because with national security law HK is finished anyway. The point is not HK (Hong Kong) but China. Sanction China as to stop it from clamping down on HK." Mr Lai said he was hoping for protection of human rights in Hong Kong and denied urging the US to engage in hostile activities against mainland China. 'I think that… freedom and human rights are, you know, a birthright for us,' he said. 'It's just very logical for me to suggest that.' He further denied all allegations of conspiracies as 'totally rubbish', which he claimed the prosecutors 'just made it up'.
South China Morning Post
28-02-2025
- Business
- South China Morning Post
Former senior US diplomat Kurt Campbell to address American and Hong Kong business leaders
Kurt Campbell, the US' second top-ranked diplomat in the former Biden administration, is expected to help promote US-Hong Kong relations and aid economic growth on both sides when he appears as keynote speaker at a conference in April. Advertisement Campbell, who served as deputy secretary of State and was a diplomat in several US administrations and is credited with Washington's 'Pivot to Asia', will speak at the AmCham Hong Kong China Conference on April 24, the chamber of commerce announced on Friday. 'We are thrilled to welcome Dr Kurt Campbell to Hong Kong for his first Asia visit since leaving the US government on January 20. Including Hong Kong in his itinerary highlights the recognition of Hong Kong as a key international business hub in Asia,' AmCham Chairman David Butts said in announcing Campbell's visit. 'We also hope that his visit will promote understanding for stronger US-Hong Kong relations and mutual economic growth.' Butts said the conference and Campbell's visit were set against a backdrop of rapidly evolving geopolitics. Advertisement AmCham said the conference aimed to 'equip businesses with the insights and strategies necessary to navigate the complexities of the US-China relationship and capitalise on emerging opportunities within the China market'.
