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I took a look at this cross today and found that it has held 7.75 for months. On further investigation it seems the HK government has guaranteed this level as a minimum.
Wouldn't then the HKD be effectively a one-way bet to go long? Or am I missing something here?
Give it a go AMR - what have you got to loose?
Only an Icelandic krona-style collapse I suppose! Might give this a shot then...they survived the Asian crisis of 1998, they'll survive this with their billions of US reserves.
USD/HKD is now a bizarre chart.
There hasnt been much in it for longers - that support level held for months but this year hasnt been touched. So I guess the selling pressure isnt that great
insufficient interest rate differential to exploit.
well the floor lasted all through the year but clearly something changed and when there was a corrective continuation pattern I thought time to jump.
according to Wiki theres a managed exchange rate
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HKMonetary Authority set up upper and lower guaranteed limit since 18 May 2005
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- US$1:HK$7.75–7.85 (May 2005 onwards)
so I guess the strategy is pretty obvious
I'm long from 7.7559 , lets see how close it gets to 7.85 , that would be 1000 pips!
a pennant is compressing on the daily - should break on the upside.
Isnt HKD pegged to the USD?
you will see if you read back a bit through this thread that I discussed this ... (talking to myself again)
its not fixed, its managed by the Hong KongMonetary Authority