Lates News

Barclays said that hedge funds have accumulated $42 billion in long positions in USD/HKD over the past two years, with approximately 8% to 10% of these positions being closed out in the past week due to market volatility and interventions by the Hong Kong Monetary Authority. Strategist Lemon Zhang and colleagues wrote in a report to clients that going long on USD/HKD is one of the most popular arbitrage trades in recent years. IPOs and dividend payments have driven demand for HKD; dividend payments from April to June are expected to reach $36.1 billion, nearly double the average in previous years. However, these drivers may weaken in the coming weeks, with Hong Kong expected to maintain its linked exchange rate system.