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%.
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.