Hong Kong Monetary Authority (HKMA) intervened yesterday against the recent rise of the HK dollar. The HK dollar is pegged at a ratio of 7.8 to the US dollar, but is allowed to trade in a range from 7.75 to 7.85. The top of the range was hit, and the HKMA stepped in to lay the smack down.
This is the HKMA’s first intervention since 2009. I have read other speculation that Hong Kong equities and property are likely to join its dollar and remain hot as long as the Fed continues to flood the world with cheap money.
Yet again, The Bernank’s actions continue to resonate around the world, as sovereign currencies race each other down the toilet!