Offshore Yuan Tumbles To 1Mo Lows Ahead Of Trade War
by Tyler Durden
ZeroHedge.com
Thu, 03/22/2018
While the Hong Kong Dollar has continued to plunge towards breaking its peg band to the US dollar, overnight saw offshore Yuan plunge back to 1-month lows despite a PBOC rate-hike, as anxiety over US trade wars ripples through markets…
The Hong Kong Dollar is at its weakest to the dollar in 33 years, heading slowly but inexorably to test the dollar peg. It has never been so close to the weak end of its trading band against the greenback…
The currency is now 0.05 percent away from HK$7.85, a level that the city’s central bank is obliged to defend. The head of the Hong Kong Monetary Authority said the exchange rate is likely to fall to the low end of the band after the U.S. lifted borrowing costs overnight. Abundant liquidity in the Asian financial hub has meant interbank rates have lagged behind U.S. levels, making it lucrative for traders to sell the local dollar.
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