The USD/HKD price is little changed as forex traders digest the latest Hong Kong trade numbers published on Tuesday. The pair is trading at 7.7617, which is 0.30% below the highest level this month.
Hong Kong trade numbers
The Hong Kong economy has made strong progress in the past few months. The number of coronavirus cases have declined and the city has started a massive vaccination drive. The city has also benefited from its strong financial sector and a return to normal after two years of mass protests. The strong China national security law has played a part in this recovery.
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The strong performance of the Hong Kong economy was seen today when the statistics agency published the latest trade data. The numbers revealed that exports increased by 26.4% in March after rising by 30.4% in the previous month. In the same period, imports increased from 17.6% to 21.7%. This led to the trade deficit widening to from H$14.7 billion to H$27 billion.
In total, the city exported goods worth more than HK$409 billion in March and exported goods worth more than H$436 billion.
Looking ahead, the USD/HKD pair will react to the upcoming Fed interest rate decision. The Fed is expected to leave interest rates unchanged at the range of between 0% and 0.25% when it concludes its meeting tomorrow.
Before then, the US dollar has gained against most currency pairs as investors start pricing in a change of language by the bank. Besides, the American economy has had a relatively strong recovery lately. The unemployment rate has fallen to 6.0% while consumer inflation has risen to more than 2%.
USD/HKD analysis
As I have written before, it is relatively difficult to analyse and even trade the USD/HKD pair. That’s because the Hong Kong dollar is pegged to the US dollar. Therefore, unlike most currencies, it is not a free-floating currency. Nonetheless, looking at the four-hour chart, we see that the pair has been in a downward trend recently. It has also formed a descending channel that is shown in black. Indeed, it is currently along the upper side of this channel. It is also being supported by the 25-day and 50-day moving average. Therefore, the pair may continue dropping as bears target the lower side of the channel at 7.7550.
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