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Speculators Target Hong Kong’s Currency on Outflow Concern

  • One-year forward points rise to highest level since 1999
  • Currency remains near strong end, buoyed by yield advantage
Hong Kong Dollar, Chinese Yuan and US Dollar Banknotes As Currency Peg Intervention From HKMA Continues Into Third Day
Photographer: Paul Yeung/Bloomberg
Updated on

Fears that capital will flee Hong Kong are visible just about everywhere in the city’s financial markets, yet the currency remains resistant for now.

Speculators are betting on significant depreciation with derivatives, sending a measure of bearishness to near its highest level of the year. Volume on Hong Kong dollar options soared to $3.7 billion on Friday, with a third of the trades betting the pegged currency would hit or break the weak end of its trading band.