Trading USD/HKD
Trading the USD/HKD is an excellent way to access the world’s two largest economies, the US and China. However, its fixed self-correcting system makes it best suited to experienced forex traders. This page will cover everything you need to know about trading the cross currency pair, from exchange spot rates to trends and forecasts. We also list the best brokers for trading the USD/HKD.
USD/HKD Trading Brokers
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1
FOREX.comActive Trader Program With A 15% Reduction In Costs
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$1000.01 Lots1:50NFA, CFTCForex, Stocks, Futures, Futures OptionsMT4, MT5, TradingView, eSignal, AutoChartist, TradingCentralWire Transfer, Credit Card, Debit Card, Visa, Mastercard, Skrill, Neteller, ACH TransferUSD, EUR, GBP, CAD, AUD, JPY, CHF, PLN -
2
NinjaTrader
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:50NFA, CFTCForex, Stocks, Options, Commodities, Futures, CryptoNinjaTrader Desktop, Web & Mobile, eSignalACH Transfer, Debit Card, Wire TransferUSD -
3
OANDA USCFDs are not available to residents in the United States.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:50NFA, CFTCForex, Crypto with Paxos (Cryptocurrencies are offered through Paxos. Paxos is a separate legal entity from OANDA)OANDA Trade, MT4, TradingView, AutoChartistWire Transfer, Visa, Mastercard, Debit Card, ACH TransferUSD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD -
4
IGForex trading involves risk. Losses can exceed deposits.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:30 (Retail), 1:250 (Pro)FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOBCFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread BettingWeb, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentralPayPal, Wire Transfer, Mastercard, Credit Card, Visa, Debit CardUSD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD -
5
Interactive Brokers
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$0$1001:50FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMAStocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, CryptocurrenciesTrader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentralCheque, ACH Transfer, Wire Transfer, Automated Customer Account Transfer Service, TransferWise, Debit CardUSD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF -
6
Videforex20% to 200% Deposit Bonus
$250$0.011:500Binary Options, CFDs, Forex, Indices, Commodities, CryptoTradingViewSkrill, Perfect Money, Bitcoin Payments, Neteller, Credit Card, Visa, Mastercard, Ethereum PaymentsUSD, EUR, GBP, AUD, RUB -
7
RedMars
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
€2500.01 Lots1:30 (Retail), 1:500 (Pro)CySECCFDs, Forex, Stocks, Indices, Commodities, CryptosMT5Credit Card, Wire Transfer, Debit Card, Sticpay, FasaPay, Bitcoin Payments, Trustly, PayPal, Skrill, Neteller, Klarna, Mastercard, VisaUSD, EUR -
8
Plexytrade120% Cash Welcome Bonus
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$500.011:2000UnregulatedCFDs, Forex, Indices, Stocks, Commodities, CryptoMT4, MT5Bitcoin Payments, Ethereum PaymentsUSD, EUR -
9
Axofa10% Deposit Bonus
$10.01 Lots1:1000SVGFSAForex, CFDs, Stocks, Indices, CommoditiesMT5Debit Card, Credit Card, Visa, Mastercard, Neteller, Skrill, Bitcoin Payments, Wire TransferUSD, IDR -
10
InstaTrade
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$10.011:1000BVI FSCFISP, CFDs, Forex, Stocks, Indices, Commodities, Cryptos, FuturesInstaTrade Gear, MT4Visa, Mastercard, Wire Transfer, Credit Card, Debit Card, Bitcoin Payments, Ethereum PaymentsUSD, EUR, RUB
Here is a short overview of each broker's pros and cons
- FOREX.com - FOREX.com continues to uphold its stature as a premier FX broker, offering over 80 currency pairs and boasting some of the most competitive fees in the industry. With EUR/USD spreads dipping as low as 0.0 and $5 commission per $100k, it stands out. Moreover, its SMART Signals help to identify price behaviors across numerous major currency markets.
- NinjaTrader - NinjaTraders supports the trading of popular currencies including the EUR/USD. The software also offers advanced features to streamline the trading experience, including complex order types like market if touched (MIT) and one cancels other (OCO).
- OANDA US - OANDA offers a diverse selection of 68 currency pairs, more than many alternatives. The broker’s in-house platform offers superb day trading capabilities via powerful TradingView charts, including 65+ technical indicators and 11 customizable chart types.
- IG - IG offers an above-average suite of 80+ currency pairs on its proprietary web platform, mobile app or MetaTrader 4, with more advanced charts and forex analysis tools available on the ProRealTime software. Forex spreads are competitive based on tests, starting from 0.1 pips on majors like the EUR/USD.
- Interactive Brokers - IBKR presents an extensive range of over 100 major, minor, and exotic forex pairs, surpassing the offerings of nearly all leading alternatives, though not CMC Markets. Forex trading occurs over multiple platforms and boasts institutional-grade spreads starting from 0.1 pips and 20 complex order types, including brackets, scale, and one-cancels-all (OCA) orders.
- Videforex - Trade 35 major, minor and exotic forex pairs through CFDs with floating spreads from 0.1 pips. Alternatively, binary options allow you to speculate on rising and falling prices with a fixed stake and payout.
- RedMars - RedMars strongest investment category is forex with more than 50 currency pairs, from majors to minors and exotics. Spreads start from 0.0 pips, catering to active currency traders, and leverage can reach 1:500. However, there are no forex heatmaps or research tools to support aspiring forex traders.
- Plexytrade - Plexytrade presents major, minor, and exotic forex pairs for trading, with leverage reaching 1:2000 and raw spreads starting from 0.0 - an enticing proposition for advanced traders seeking gains from minor price shifts. However, the downside lies in the limited selection, with only 41 currency pairs available, significantly fewer than the 100+ forex assets at IG.
- Axofa - Axofa offers a decent range of 50+ forex pairs with raw spreads from 0.0 pips. Very high leverage up to 1:1000 and commission-free forex trading is available. With that said, the broker is not particularly transparent when it comes to account conditions and fees.
- InstaTrade - InstaTrade offers a huge selection of around 100 currency pairs. It provides spreads starting at 0.0 on majors, plus integrated forex analysis in the web platform, featuring signals, plus technical and fundamental summaries. Additionally, InstaTrade offers educational modules covering forex basics for beginners, including margin trading and risk management.
Trading USD/HKD Comparison
| Broker | Forex Assets | EUR/USD Spread | Forex App Rating | Minimum Deposit | Regulator |
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80+ | 1.2 | / 5 | $100 | NFA, CFTC |
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50+ | 1.3 | / 5 | $0 | NFA, CFTC |
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65+ | 1.6 | / 5 | $0 | NFA, CFTC |
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80+ | 0.8 | / 5 | $0 | FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB |
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100+ | 0.08-0.20 bps x trade value | / 5 | $0 | FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA |
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35 | Floating from 0.1 pips | / 5 | $250 | - |
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50+ | 0.7 | - | €250 | CySEC |
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40+ | 0.7 | - | $50 | Unregulated |
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10+ | From 1.6 pips | - | $1 | SVGFSA |
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65 | 0.0 | - | $1 | BVI FSC |
FOREX.com
"FOREX.com remains a best-in-class brokerage for active forex traders of all experience levels, with over 80 currency pairs, tight spreads from 0.0 pips and low commissions. The powerful charting platforms collectively offer over 100 technical indicators, as well as extensive research tools."
Christian Harris, Reviewer
FOREX.com Quick Facts
| Bonus Offer | Active Trader Program With A 15% Reduction In Costs |
|---|---|
| GBPUSD Spread | 1.3 |
| EURUSD Spread | 1.2 |
| EURGBP Spread | 1.4 |
| Total Assets | 80+ |
| Leverage | 1:50 |
| Platforms | MT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, CHF, PLN |
Pros
- There’s a wealth of educational resources including tutorials, webinars, and a stacked YouTube channel to help you get educated in the financial markets.
- Alongside a choice of leading platforms, FOREX.com offers a superb suite of supplementary tools including Trading Central research, SMART Signals pattern scanner, trading signals, and strategy builders.
- With over 20 years of experience, excellent regulatory oversight, and multiple accolades including runner-up in our 'Best Forex Broker' awards, FOREX.com boasts a global reputation as a trusted brokerage.
Cons
- There’s no negative balance protection for US clients, so you may find yourself owing more money than your initial deposit into your account.
- Demo accounts are frustratingly time-limited to 90 days, which doesn’t give you enough time to test day trading strategies effectively.
- FOREX.com's MT4 platform offers approximately 600 instruments, significantly fewer than the over 5,500 available on its non-MetaTrader platforms.
NinjaTrader
"NinjaTrader continues to meet the demands of active futures traders looking for low fees and premium analysis tools. The platform hosts top-rate charting features including hundreds of indicators and 10+ chart types."
Tobias Robinson, Reviewer
NinjaTrader Quick Facts
| GBPUSD Spread | 1.6 |
|---|---|
| EURUSD Spread | 1.3 |
| EURGBP Spread | 1.6 |
| Total Assets | 50+ |
| Leverage | 1:50 |
| Platforms | NinjaTrader Desktop, Web & Mobile, eSignal |
| Account Currencies | USD |
Pros
- Traders can get free platform access and trade simulation capabilities in the unlimited demo
- NinjaTrader continues to deliver comprehensive charting software for active day traders with bespoke technical indicators and widgets
- NinjaTrader is a widely respected and award-winning futures broker and is heavily authorized by the NFA and CFTC
Cons
- The premium platform tools come with an extra charge
- There is a withdrawal fee on some funding methods
- Non forex and futures trading requires signing up with partner brokers
OANDA US
"OANDA remains an excellent broker for US day traders seeking a user-friendly platform with premium analysis tools and a straightforward joining process. OANDA is also heavily regulated with a very high trust score."
OANDA US Quick Facts
| GBPUSD Spread | 3.4 |
|---|---|
| EURUSD Spread | 1.6 |
| EURGBP Spread | 1.7 |
| Total Assets | 65+ |
| Leverage | 1:50 |
| Platforms | OANDA Trade, MT4, TradingView, AutoChartist |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD |
Pros
- Beginners can get started easily with $0 minimum initial deposit
- Day traders can enjoy fast and reliable order execution
- Seasoned day traders can access industry-leading tools, including an MT4 premium upgrade and advanced charting provided by MotiveWave
Cons
- The range of day trading markets is limited to forex and cryptos only
- There's only a small range of payment methods available, with no e-wallets supported
- It's a shame that customer support is not available on weekends
IG
"IG continues to provide a comprehensive package with an intuitive web platform and best-in-class education for beginners, plus advanced charting tools, real-time data, and fast execution speeds for experienced day traders."
IG Quick Facts
| GBPUSD Spread | 0.9 |
|---|---|
| EURUSD Spread | 0.8 |
| EURGBP Spread | 0.9 |
| Total Assets | 80+ |
| Leverage | 1:30 (Retail), 1:250 (Pro) |
| Platforms | Web, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD |
Pros
- The proprietary web-based platform continues to caters to traders of all levels, with advanced charting tools and real-time market data useful for day trading
- IG is amongst the best in terms of its range of instruments, which includes stocks, forex, indices, commodities, and cryptocurrencies, providing ample diversification opportunities
- The ProRealTime advanced charting platform is free as long as certain modest monthly trading activity requirements are met
Cons
- While there is negative balance protection in the UK and EU, there is no account protection or guaranteed stop losses for US clients
- Stock and CFD spreads still trail the cheapest brokers like CMC Markets based on tests
- Beginners might find IG’s fee structure complex, with various fees for different types of trades or services, potentially leading to confusion or unexpected charges
Interactive Brokers
"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."
Interactive Brokers Quick Facts
| GBPUSD Spread | 0.08-0.20 bps x trade value |
|---|---|
| EURUSD Spread | 0.08-0.20 bps x trade value |
| EURGBP Spread | 0.08-0.20 bps x trade value |
| Total Assets | 100+ |
| Leverage | 1:50 |
| Platforms | Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral |
| Account Currencies | USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF |
Pros
- The new IBKR Desktop platform takes the best of TWS while adding bespoke tools like Option Lattice and Screeners with MultiSort to create a genuinely impressive trading experience for day traders at every level.
- The TWS platform has clearly been built for intermediate and advanced traders and comes with over 100 order types and a reliable real-time market data feed that rarely goes offline.
- While primarily geared towards experienced traders, IBKR has made moves to broaden its appeal in recent years, reducing its minimum deposit from $10,000 to $0.
Cons
- TWS’s learning curve is steep, and beginners may find it challenging to navigate the platform and understand all the features. Plus500's web platform is much better suited to new traders.
- IBKR provides a wide range of research tools, but their distribution across trading platforms and the web-based 'Account Management' page lacks consistency, leading to a confusing user experience.
- You can only have one active session per account, so you can’t have your desktop program and mobile app running simultaneously, making for a sometimes frustrating trading experience.
Videforex
"Newer traders will find a lot to enjoy about trading binary options on Videforex's easy-to-use proprietary platform, as well as the broker's copy trading solution. Payouts also remain higher than most alternatives climbing to 98%."
Videforex Quick Facts
| Bonus Offer | 20% to 200% Deposit Bonus |
|---|---|
| GBPUSD Spread | Floating from 0.1 pips |
| EURUSD Spread | Floating from 0.1 pips |
| EURGBP Spread | Floating from 0.1 pips |
| Total Assets | 35 |
| Leverage | 1:500 |
| Platforms | TradingView |
| Account Currencies | USD, EUR, GBP, AUD, RUB |
Pros
- The firm facilitates both day trading and binary options which is great for those looking to diversify their portfolios
- You can easily mirror the trades of experienced investors with low fees
- Videforex allows you to enter positions with just ¢0.01
Cons
- US clients aren’t accepted due to legal restrictions
- No MetaTrader 4 integration
- The broker isn’t overseen by a trusted regulatory agency
RedMars
"RedMars is the best fit for experienced day traders familiar with the MetaTrader 5 platform and based in the EU, where the broker is authorized by the CySEC. However, the threadbare education and research tools make it unsuitable for beginners."
RedMars Quick Facts
| GBPUSD Spread | 0.7 |
|---|---|
| EURUSD Spread | 0.7 |
| EURGBP Spread | 1.1 |
| Total Assets | 50+ |
| Leverage | 1:30 (Retail), 1:500 (Pro) |
| Platforms | MT5 |
| Account Currencies | USD, EUR |
Pros
- Getting started on RedMars is incredibly easy - you can be up and running in just a few minutes based on tests
- Clients in the EU, in particular, can trade with peace of mind knowing RedMars is authorized by the CySEC with up to €20K compensation available through the ICF in the event of bankruptcy
- RedMars offers one of the best platforms for day trading, MT5, hosting 21 timeframes, dozens of analytical tools, flexible templates and algo trading
Cons
- With just 300 instruments, RedMars offers a narrow trading environment, particularly compared to category leaders like BlackBull Markets which offers 26,000 assets
- While RedMars' spreads are within industry averages, they don't offer a significant edge over the cheapest day trading brokers we've personally used, notably IC Markets
- The no-frills trading environment offers little beyond the basics, with no Islamic account, PAMM account or copy trading.
Plexytrade
"Plexytrade is a newcomer in the brokerage scene with attention-grabbing features like 1:2000 leverage, zero spreads on select instruments and fast execution speeds of less than 46 milliseconds. However, the absence of regulation is a significant concern, while the non-existent research and educational tools place it far behind industry frontrunners."
Plexytrade Quick Facts
| Bonus Offer | 120% Cash Welcome Bonus |
|---|---|
| GBPUSD Spread | 0.8 |
| EURUSD Spread | 0.7 |
| EURGBP Spread | 1.1 |
| Total Assets | 40+ |
| Leverage | 1:2000 |
| Platforms | MT4, MT5 |
| Account Currencies | USD, EUR |
Pros
- Despite lacking regulation, Plexytrade provides negative balance protection and reinforces safety protocols by holding client funds in segregated accounts.
- US residents are accepted as clients, distinguishing Plexytrade as one of the rare offshore brokers that cater to US-based traders.
- Plexytrade offers among the highest leverage we’ve seen, up to 1:2000, catering to advanced traders willing to forego regulatory protections.
Cons
- Deposits and withdrawals are exclusively facilitated through cryptocurrencies, as Plexytrade does not support bank cards, bank wire transfers, or e-wallets.
- There are no research and educational materials, falling short of alternatives like IG, while access to the economic calendar is restricted to clients with balances of $500.
- There are no social or copy trading features for inexperienced traders to replicate the trades of more experienced investors, trailing category leaders like eToro.
Axofa
"Axofa could be a good option for clients looking for social trading features alongside the MT5 platform. The low entry requirements and ECN spreads are particularly promising, but the lack of transparency and respected regulatory oversight raises security concerns."
Axofa Quick Facts
| Bonus Offer | 10% Deposit Bonus |
|---|---|
| GBPUSD Spread | From 1.6 pips |
| EURUSD Spread | From 1.6 pips |
| EURGBP Spread | From 1.6 pips |
| Total Assets | 10+ |
| Leverage | 1:1000 |
| Platforms | MT5 |
| Account Currencies | USD, IDR |
Pros
- Low ECN spreads are available from 0.0 pips, plus reasonable commissions at $3.50 per side
- Axofa offers the MetaTrader 5 platform which will particularly serve intermediate to experienced traders looking for advanced charting tools
- There's a proprietary social/copy trading service for beginners looking to follow successful strategies and for experienced traders looking to sell their strategies
Cons
- There is limited verifiable information about the broker’s owners and background
- The offshore operations and lack of any regulatory oversight is a major concern
- There is a lack of transparency around pricing and account conditions, which significantly reduces the trust score
InstaTrade
"Although InstaTrade offers active trading on a comprehensive platform, it stands out with its fairly unique Fixed Income Structured Product (FISP), providing passive investment opportunities with up to 50% returns in 6 months if conditions are met. "
InstaTrade Quick Facts
| GBPUSD Spread | 0.2 |
|---|---|
| EURUSD Spread | 0.0 |
| EURGBP Spread | 2.8 |
| Total Assets | 65 |
| Leverage | 1:1000 |
| Platforms | InstaTrade Gear, MT4 |
| Account Currencies | USD, EUR, RUB |
Pros
- InstaTrade delivers an excellent suite of charting tools for day traders with its web trader comprising 250+ indicators, 11 chart types and a user-friendly design.
- VPS hosting caters to algo trading strategies with a dedicated physical server providing rapid execution speeds as low as 9 milliseconds.
- InstaTrade claims to "guarantee" returns through the structured element of its passive trading solution (FISP), with applications approved within 24 hours.
Cons
- InstaTrade is registered in the offshore jurisdiction of the British Virgin Islands, resulting in limited regulatory safeguards for retail investors.
- Profits are only guaranteed in the FISP if investors do not reach the 50% profit level and attract other users with a total sum of $4 for each dollar in compensation.
- InstaTrade sports one of the most cluttered websites and client cabinets in the industry, potentially overwhelming new traders, especially compared to XTB’s intuitive trading journey and resources.
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The Hong Kong Dollar
Hong Kong is one of the most attractive free-market economies for foreign investment. Its stock market is the 6th largest and its exchange fund has become one of the world’s biggest with reserves totalling 442 billion USD at the end of 2020. This is all rather impressive given the size of the island state.
Hong Kong is also widely considered a gateway into the Chinese mainland and despite the nation’s best efforts, its fortunes are becoming increasingly tied to the Asian superpower. As a result, any geopolitical events tied to China can impact the volatility of the USD/HKD.
USD/HKD History
In 1983, the Hong Kong dollar was pegged to the US dollar. After months of unease, the HKD hit an all-time low of 9.6 HKD per USD. As a result, the nation abandoned the floating exchange rate and pegged the HKD to the USD in an attempt to stabilise the currency.
Today, the USD/HKD pair typically trades between narrow limits, 7.75 and 7.85, as fixed by the Hong Kong Monetary Authority (HKMA). The fixed system self-corrects to maintain the stability of the HKD exchange rate.
Over its history, the pair has seen tumultuous times and maintaining the peg has not been easy. The US’ low-interest rates have caused problems for the HKMA, which has been forced to match them. As a result, property prices and the Hong Kong exchange rate have increased dramatically in recent years.
Influences On USD/HKD Movement
The USD/HKD is special in that many of the economic factors that influence movement in most currency pairs have a limited effect on the USD/HKD. Labour market conditions plus interest and inflation rates all have a muted effect on the pair given that it operates between a fixed, pre-determined range. As a result, many speculative investors are put off and generating profit requires skill and patience.
Fortunately, some factors still influence the quoted price of the HKD/USD:
- Economic growth – The strength of an economy is often reflected in the value of its currency. When the Hong Kong economy is strong, HKD will rise against the USD. Conversely, a weakened Hong Kong economy will see the HKD fall against the USD.
- China – Hong Kong is closely linked with China which means that changes in the value of the Chinese yuan can heavily influence the value of the USD/HKD. This was seen during the Asian financial crisis when the HKD rose towards its upper limit several times. Usually, the currencies move in the same direction.
- Political stability – Political turmoil and major events can have huge implications on the value of a currency. Generally speaking, stability is likely to attract foreign investment and increased investment will lead to an appreciation in the currency’s quoted price.
- Market sentiment – If the value of the USD is expected to fall, there will be less demand as investors will typically need more of it to bank profit. A drop in value can mean more expensive exports and reduced competitiveness in global markets. Hong Kong relies on both imports and exports, so any change is felt heavily.
Pros Of Trading USD/HKD
- The Chinese economy – Hong Kong’s close ties with China means that for many, the HKD represents an accessible way to engage in the Chinese economy. China takes in more than half of Hong Kong’s exports and currently stands as the second-largest global economy. China’s position on the world stage is a real draw for many forex traders.
- Risk/reward ratio – Given the pegging of the USD/HKD pair, the risk/reward ratio is favourable. The assurance of a bottom limit means that traders can operate within relatively safe parameters. This does mean, however, that generating large profits can prove challenging.
- Liquidity – The forex market generally promises a highly liquid environment with low bid-ask spreads. This makes FX trading popular over assets, such as stocks and cryptos.
- Costs – Transaction costs are usually incorporated into the spread and pips in forex markets, meaning traders typically don’t have to factor in additional commissions.
Cons Of Trading USD/HKD
As with any forex pair, trading USD/HKD does come with risks:
- Re-pegging – If HKD was to be re-pegged to the USD or even the CNY, it would have drastic implications for investments. Traders should ensure they are up to date with the latest financial news and conversion forecasts. Risk and money management strategies should also be implemented.
- Leverage – Leveraged trading is popular in the forex market but it does carry increased risk. Margin trading should only be used by traders comfortable with greater exposure.
- Political intervention – Political unrest, as seen in recent riots in Hong Kong, can have major implications on the pair’s valuation. Keep an eye on announcements from the Chinese government to stay ahead of trends.
USD Vs HKD Strategy Options
When it comes to USD/HKD strategy, different tactics work for different people. Capital requirements, timescales and risk tolerance will all play a role. Whether you choose to use exchange rate historical data and monthly averages or live charts and forward rates, different tools work for different traders.
Trading News
For those less interested in trading using USD/HKD historical exchange rates, live charts, graphs and forecasts, financial news is a great source of information to help inform investment decisions. Economic reports on the latest inflation and interest rates, GDP and consumer sentiment can all influence movement. Traders should stay abreast of updates to react quickly. The first movers stand the best chance of asserting an edge.
Oanda, Reuters, Yahoo Finance, DailyFX, online converters, TradingView and MarketWatch are just a handful of the resources available to traders. They provide live forex updates in addition to forecasts, daily USD/HKD buy and sell swap rates, plus commentary.
Carry Trading
Carry trading is a popular strategy that enables investors to capitalise on low interest rates. Traders borrow more in currencies with lower interest rates and invest in high-yielding markets. The demand creates inflows of capital which strengthens a currency.
The recent widening of the gap between Hong Kong and US interest rates has seen a surge in investors opening new carry trade positions. The relatively low-interest rates of the HKD means that some investors will look to borrow against the USD and invest in the HKD.
USD/HKD Forecasts
There is speculation that the HKD will be re-pegged amid concerns that the peg may be limiting growth in Hong Kong. Adjustments to the peg range or a peg break would allow for greater movement. There is also talk that the Hong Kong dollar could be pegged to the Chinese yuan in the future. However, the possibility of a slowdown in Chinese economic growth may halt that move for now.
There is also some discussion about the long-term prosperity of the Hong Kong dollar. Some experts argue that with the increasing Chinese influence over the state, the outlook is looking bleak for the HKD, which may become redundant.
Final Word On Trading USD/HKD
The narrow range of the USD/HKD cross currency pair means that it can be difficult to generate profit and traditional strategies don’t always yield the same results. For many, the pair’s potential primarily lies in business transactions and swaps. For those that do wish to trade the pair, it presents an opportunity to gain access to the relatively closed-off Chinese economy.
FAQ
What is the USD to HKD exchange rate history?
The pair has seen a tumultuous history which has led to fluctuations in the quoted price of both the US and Hong Kong dollar. The currency peg has stabilised much of this but with speculation over the adoption of a new peg, who knows what the future holds.
What is the USD to HKD dollar conversion?
The current exchange rate is displayed on a live price chart. This shows how many Hong Kong dollars are needed to buy 1 US dollar. This rate will fluctuate within the fixed limits established by the HKMA.
What influence does the BoC have over the USD/HKD?
The integration of Hong Kong’s economy with China means that the Bank of China exerts influence over the position of the HKD. Anticipating announcements from the BoC can help inform investment decisions.
What are the best HKD to USD forex converters?
There are many free, currency converters available online. For more information on USD/HKD rates, ETFs and futures, try Oanda.
What is the USD and HKD peg history?
In 1983, the Hong Kong dollar was pegged against the US dollar in an attempt to stabilise the currency. Today, it continues to operate between the established fixed limits. With that said, there is talk that the peg may be removed or amended in the future.