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U.S. Threat on Hong Kong Dollar ‘Self-Defeating’, Say Economists

  • Other less extreme options likely to be considered, they say
  • China’s strong external position would help mitigate fallout
Bloomberg business news
How Realistic Is Trump Advisors' Threat to Target H.K. Dollar Peg?
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The threat of U.S. action to undermine Hong Kong’s longstanding U.S. dollar peg is highly unlikely to become reality given the practical difficulties of pursing such a path and the damage it would do to U.S. interests, economists say.

Economists reacted after a report that some advisers to President Donald Trump want the U.S. to undermine the Hong Kong dollar peg as the administration considers options to punish China for limiting Hong Kong’s autonomy, according to people familiar with the matter. Hong Kong has pegged its currency to the U.S. dollar since 1983, allowing it to fluctuate within a fairly strict band that has centered around 7.8 per U.S. dollar.