Standard Chartered
According to a Standard Chartered research note, a change to the HKD peg in any form, be it the trading band range or the currency, is «extremely low for now» as it believes local authorities possess «ample ammunition and political will to defend the peg even when the going gets tough».
«The recent move higher in USD/HKD towards 7.85 has been orderly, indicating modest capital outflows, even as talk of political uncertainty drives money out of Hong Kong,» the bank said.
«The up-move could have been more drastic considering weakness in the Hang Seng Index (HSI) and sharp swings in Hong Kong-focused equity ETF flows ($2.6 billion outflow since mid-April or more than 10 percent of the ETFs’ total respective assets). The HSI has declined by c.13 percent over this period. While ETF outflows have picked up pace in August as the HSI has fallen further, we see no signs of panic outflows.»
The bank lowered its Hong Kong GDP growth projections to 0.5 percent for 2019 (from 1.4 percent) and 1.5 percent for 2020 (from 2 percent).
