Hong Kong Dollar Carry Trade Flares on Widest Yield Gap Since 2007

Hong Kong Dollar Carry Trade Flares on Widest Yield Gap Since 2007

Assessment

Interactive Video

Business

University

Hard

Created by

Quizizz Content

FREE Resource

The video discusses the dynamics of the Hong Kong dollar, a currency that moves slowly but has seen rapid shifts due to the carry trade. Traders benefit from higher US interest rates compared to Hong Kong's, leading to the widest gap since 2007. This gap is expected to persist, making shorting the Hong Kong dollar a viable trade. The Hong Kong Monetary Authority (HKMA) manages the currency when it hits the band limits.

Read more

2 questions

Show all answers

1.

OPEN ENDED QUESTION

3 mins • 1 pt

What does it mean for the Hong Kong dollar to be a peg currency?

Evaluate responses using AI:

OFF

2.

OPEN ENDED QUESTION

3 mins • 1 pt

What actions might the HKMA take when the Hong Kong dollar hits the weekend of the band?

Evaluate responses using AI:

OFF