HKMA follows Fed’s footsteps, announces third rate cut, USD/HKD seesaws around 7.84
Early Asian morning on Thursday, the Hong Kong Monetary Authority cuts its key interest rate by 25 basis points (bps). The rate reduction follows the US Federal Reserve’s pattern while being the third consecutive and of the same magnitude.
“A more accommodative monetary stance will give Hong Kong’s economy some support,” said the South China Morning Post (SCMP) story while quoting DBS Bank's managing director Tommy Ong, who spoke ahead of the report.
“An estimated US$130 billion of foreign capital poured into Hong Kong’s assets during the previous cycle of interest rate cuts in the aftermath of the 2008 Global Financial Crisis, setting off a decade-long property bull run that drove home prices to the highest among global urban centres. Unaffordable housing has been cited as one of the biggest grievances that have seen young protesters to take to the streets, in Hong Kong’s most severe civil strife that is running into its fifth month. The HKMA’s chief executive Eddie Yue Wai-man is scheduled for a press conference today about the rate cut,” mentions the SCMP news.
FX implications
With the similar rate cut than the United States’ central bank, the USD/HKD pair recovered post-Fed rate decision losses while trading near 7.84. It should be noted that traders will now await downbeat signals from the HKMA executive to propel the pair.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
