Hong Kong is a leading global financial center and its economy is considered to be the freest in the world. As of 18 May 2005, in addition to the lower guaranteed limit, a new upper guaranteed limit was set for the Hong Kong dollar at HK$7.75 to the US dollar. The lower limit has been lowered from 7.80 to 7.85 (by 100 pips per week from 23 May to 20 June 2005).[23] The Hong Kong Monetary Authority indicated this move is to narrow the gap between the interest rates in Hong Kong and those of the United States. A further aim of allowing the Hong Kong dollar to trade in a range is to avoid the HK dollar being used as a proxy for speculative bets on a renminbi revaluation. Our currency rankings show that the most popular Hong Kong Dollar exchange rate is the HKD to USD rate. Our currency rankings show that the most popular US Dollar exchange rate is the USD to USD rate.
- Live tracking and notifications + flexible delivery and payment options.
- One of the key roles of the HKMA is maintaining currency stability.
- Analysts and AI-based forecast services can and do get their predictions wrong.
However, real estate developers’ debts, which are underwritten by the nation’s banks, are a volatile and significant influence on Hong Kong’s economy. For a long time, Hong Kong has been a key financial and trading hub in Asia thanks to its low taxes. Almost every significant securities house and global bank has housed an office in the country, and the Hong Kong Stock Exchange is rated the sixth largest in the world by market capitalisation. Unsurprisingly, the nation’s economy is heavily services-based and, although manufacturing does take place in Hong Kong, over 80% of the workforce is employed in the service industry, including hospitality, financial services, retail and trade. There is a school of thought that says that as Shanghai is becoming more important as a financial centre, Hong Kong must eventually become less significant.
Understanding the HKD (Hong Kong Dollar)
In this scenario, capital outflows from Hong Kong could slow, taking pressure off the HKMA to maintain the peg below the 8.85 upper band. At the start of the current quarter, on 1 October, nfp in trading the USD/HKD rate stood at 8.83. Meanwhile, Trading Economics’s euro to Hong Kong dollar forecast saw the pair’s rate falling to 7.984 by the end of 2022 and 7.609 by the end of 2023.
These are the average exchange rates of these two currencies for the last 30 and 90 days. The Federal Reserve slowing hikes would take pressure off other central banks to shore up their currencies against the USD and could help stem capital flight. When the outflow of Hong Kong dollars increases, the HKMA buys Hong Kong dollars and sells US dollars to prevent the exchange rate from rising above 7.85. Meanwhile, the HKMA has raised interest rates five times this year and bought Hong Kong dollars to steady the currency against the rapidly rising USD.
The HKD is also one of only a few currencies that are likely to enter obsolescence at some point in the future, as long as free trading of the Chinese Renminbi is eventually permitted, as there would no longer be any point in trading the Hong Kong Dollar. At the present time, however, the Hong Kong Dollar is still one of the the most important global trading currencies, being the eighth most traded on the Forex market. Even though it is Asia’s third most traded currency, the Hong Kong Dollar is still not a significant reserve currency. The HKD is not permitted to trade freely, and is under the administration of the Hong Kong Monetary Authority.
However, whether the currency could get stronger remains to be seen. Analysts and AI-based forecast services can and do get their predictions wrong. Keep in mind that past performance is no guarantee of future returns. In the longer term, its https://g-markets.net/ US dollar Hong Kong dollar forecast for 2025 suggested the rate could rise to 7.913 by the end of the year. The Fed’s aggressive stance on hiking interest rates this year has pushed up the USD and fuelled a capital flight from Hong Kong.
Convert from Hong Kong Dollar (HKD) to United States Dollar (USD)
Depending on where you live, you may be able to trade USD HKD at any time throughout the day or night. For those who want to take advantage of these opportunities, it is important to know when USD HKD trading hours begin and end. Established in 1993, the Hong Kong Monetary Authority is the central bank of the island and acts to control inflation and maintain the stability of the Hong Kong dollar (HKD) and of the banking sector through its monetary policy. The HKD is the ninth most traded currency, and because it is pegged to the U.S. dollar, with upper and lower limits, it does not exhibit any strong unique correlations with other currencies. In 1873, the international silver crisis resulted in a devaluation of silver against gold-based currencies. Since the silver dollars in the US and Canada were attached to a gold exchange standard, this meant that the silver dollars circulating along the China coast dropped in value as compared to the U.S. dollar and the Canadian dollar.
The latest Hong Kong dollar developments
In 1960, cupro-nickel 1-dollar coins were introduced, these were then reduced in size in 1978. They were followed in 1975 by nickel-brass 20 cents and cupro-nickel 2-dollar coin (both scallop shaped), and in 1976 by decagonal, cupro-nickel 5-dollar coin, changed to a round thicker shape in 1980. The 5-cent coin was last issued in 1979, but last struck in 1988. Three commercial banks are licensed by the Hong Kong Monetary Authority to issue their own banknotes for general circulation in Hong Kong. These banks, HSBC, Bank of China, and Standard Chartered, issue their own designs of banknotes in denominations of HK$20, HK$50, HK$100, HK$150, HK$500, and HK$1000, with all designs being similar to one another in the same denomination of banknote.
Has the Hong Kong dollar been going up or down?
Under capital control laws, a bank can only use HK dollars if it has the equivalent value of U.S. dollars on deposit. Onshore banking liquidity falls when the HKMA uses foreign exchange reserves to buy HKD from commercial banks. The tighter liquidity lifts interest rates which then attracts capital back to Hong Kong, lifting the HKD. However, banknotes were not produced until the 1860s, when the Oriental Bank, the Chartered Bank of India, Australia and China and the Hong Kong and Shanghai Banking Corporation began issuing notes.
The US dollar (USD, “Greenback”) is the most widely traded currency in the world. This trading band versus the USD has been in place since 1983, although the upper and lower limits have been adjusted periodically. The HKMA has about $450 billion+ USD in foreign reserves to thwart any attempts to break the peg with the USD. One notable attempt was made by legendary hedge fund manager George Soros in 1998. The Hong Kong dollar was first seen as a distinct currency in 1863. Before then, various foreign currencies had been used and continued to be used even after the HKD’s inception.
The fixed exchange rate system seeks to maintain parity with the USD within a tight range, allowing HKD note-issuing banks to issue new banknotes only when they deposit an equivalent value of U.S. dollars with the authority. In 1945, paper money production resumed essentially unaltered from before the war, with the government issuing 1 cent, 5 cents, 10 cents, and 1-dollar notes, and the three banks issuing 5, 10, 50, 100 and 500-dollar notes. 1-dollar notes were replaced by coins in 1960, with only the 1-cent note issued by the government after 1965.
New British trade dollars were coined at the mints in Calcutta and Bombay for use in both Hong Kong and the Straits Settlements. In 1906, the Straits Settlements issued their own silver dollar coin and attached it to a gold sterling exchange standard at a fixed value of 2 shillings and 4 pence. This was the point of departure as between the Hong Kong unit and the Straits unit.
The USD/HKD is a popular pair for trading the Hong Kong currency. Live tracking and notifications + flexible delivery and payment options. These are the lowest points the exchange rate has been at in the last 30 and 90-day periods. These are the highest points the exchange rate has been at in the last 30 and 90-day periods. The Federal Reserve may slow the pace at which it hikes rates over the coming months.