The Hong Kong dollar fell 78 points against the greenback during the overnight trading session on the back of broad based bullish dollar sentiment and declining equities. The USDHKD rose above the 7.8100 handle for the first time since June 17, as it realized the largest amount of volatility for the pair since June 30, which on average fluctuates 35 points in a day.
[B]Talking points
• USDHKD Jumps Above 7.8100
• USDSGD Breaks Above 1.400
• Equities Lower On Lower U.S. Outlook
[/B]
The Hong Kong dollar fell 78 points against the greenback during the overnight trading session on the back of broad based bullish dollar sentiment and declining equities. The USDHKD rose above the 7.8100 handle for the first time since June 17, as it realized the largest amount of volatility for the pair since June 30, which on average fluctuates 35 points in a day. The dollar which has been appreciating across all major currencies received a shot in the arm yesterday, when ECB President Jean-Claude Trichet signaled that the central bank wouldn’t tighten rates further.
The USDSGD continued its climb higher breaking above the 1.4000 handle for the first time since February 22. After an initial surge at the open, subsequent choppy trading would eventually get the pair above the technical level. Singapore continues to see growth in the country slow, weighed by falling exports. Fears are growing the government will lower its growth outlook for the year, which could drag the Singapore dollar lower.
A barren economic calendar for the emerging market currencies will leave all the vent risk on the U.S. side with wholesale sales scheduled for release. A print exceeding the expected 0.4% gain could trigger further bullish dollar sentiment, as it may be a sign that consumer consumption will continue to remain strong despite the end of the fiscal stimulus plan.
For more emerging market news read the Daily Fundamental report.
