The Hong Kong markets were closed today due to severe tropical storms, which has led to choppy price action for the USDHKD. The pair traded heavy following the Fed decision, but would only drop 15 points. Price action has consolidated above the 1.8045 handle, after a brief spike higher following the Cathy Pacific earnings release. Indeed, the Hong Kong airline announced that it had a loss of 663 million Hong Kong dollars (85 million US) in the first half of 2008. It was the first decline in five years and a 125.7 percent lower than profits over the same period a year ago.
The Hong Kong markets were closed today due to severe tropical storms, which has led to choppy price action for the USDHKD. The pair traded heavy following the Fed decision, but would only drop 15 points. Price action has consolidated above the 1.8045 handle, after a brief spike higher following the Cathy Pacific earnings release. Indeed, the Hong Kong airline announced that it had a loss of 663 million Hong Kong dollars (85 million US) in the first half of 2008. It was the first decline in five years and a 125.7 percent lower than profits over the same period a year ago.
The Singapore dollar gain over 50 points following the Fed’s decision to hold rates steady at 2.00%. Chairman Bernanke’s balanced statement following the policy meeting significantly reduced expectations for a rate hike by the end of the year leading to the dollar to weaken across the board. After falling to as low as 1.3761, profit taking has led to the pair retracing. Also, growth concerns in the region are weighing on the Singapore dollar.
The markets may settle with little price action given the virtually empty economic calendar, with only U.S. MBA applications as the sole event risk. The looming rate decisions by the ECB and BoE may also dampen activity as the sum of the potential event risk can potentially impact several currencies. However, the potential stands for dollar weakness to accelerate as traders digest further the comments from the Fed and oil finds support after falling below $120 a barrel.
