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Lift-off on USD/HKD - Nomura

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 20, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Delhi) – Research Team at Nomura, recommended being long 12M USD/HKD outright and forecast spot to rise to 7.80 by Q2 2016.

    Key Quotes

    “The speed of the move in spot has been faster than expected and we now believe there is a risk that 7.85 on spot will be tested in coming months. The implication of this will be HKD liquidity withdrawals and upward pressure on USD/HKD forwards.

    As such, we maintain our long 12M USD/HKD recommendation in view of the weak side of the USD/HKD convertibility undertaking rate being tested by the market. We note that 12M USD/HKD is currently pricing in around a 0.5% depreciation, compared with an over 10% depreciation during the Asia financial crisis.”
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