USD/HKD carry trade shrugs off interventions
Rate differential drives Hong Kong currency higher despite HKMA’s efforts
The widening gap between Hong Kong and US dollar interest rates is encouraging traders to open new carry trade positions, despite recent interventions from the Hong Kong Monetary Authority (HKMA) to narrow the spread.
The carry trade is a popular trading strategy that allows investors to borrow at a low interest rate and invest in assets that yield a better return.
In this case investors are borrowing against the lower US rate and investing in the Hong Kong dollar. This is a reversal of the
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact customer services - www.fx-markets.com/static/contact-us, or view our subscription options here: https://subscriptions.fx-markets.com/subscribe
You are currently unable to print this content. Please contact customer services - www.fx-markets.com/static/contact-us to find out more.
You are currently unable to copy this content. Please contact info@fx-markets.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@fx-markets.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@fx-markets.com
More on Trading
Quants dive into FX fixing windows debate
Longer fixing windows benefit clients, but predicting how dealers will respond is tough
Hedge funds take profit on vol trades with Trump win
FX volatility drops sharply as positions unwind; rates market sees mixed reaction
Shanghai Clearing House urged to take bond collateral for FX trades
Dealers complain that feeble interest rate paid on cash margin raises cost of clearing
BofA’s e-FX rebuild pulls it closer to rivals
Deploying its equities tech stack, bank seeks to get ahead with its algo and e-FX offerings
Exotic FX derivatives bets in play as US election vol jumps
Forward volatility agreements see profits for funds; new trades include vol knockouts
BNP Paribas hires New York FXO head from Deutsche Bank
Former emerging markets FX options trader joins French bank to lead desk
Citi poaches FX options trading duo from Barclays
US bank adds to its London and Singapore FXO trading desks
Rates movements boost FX net investment hedging
Changing differentials bring more positive carry opportunities for corporates
