Despite posting much better-than-expected retail sales data on Monday, the Hong Kong Dollar has depreciated a little against the Pound. This is as a result of the ongoing protests by Hong Kong citizens who demand free and open elections and the resignation of Chief Executive Leung Chun-ying. British data on Monday has been disappointing and Sterling has declined against many of its most traded currency peers.
The Pound Sterling to Hong Kong Dollar exchange rate is currently trending in the region of 12.6290.
Sterling enjoyed a positive surge last week following the Unionist victory in the Scottish independence referendum. Sterling got a further boost on Thursday after Bank of England Governor Mark Carney gave a speech in which he suggested that nearly all of the conditions for normalising monetary policy have now been met.
Hong Kong’s domestic data was relatively mixed last week. The Bank of Hong Kong Current Account showed a huge declination, and the Inflation Rate also fell from the previous figure. Balance of Trade improved upon the previous score having increased beyond the median market forecast.
The Pound Sterling to Hong Kong Dollar exchange rate has hit a low today of 12.5830.
Monday’s British economic data has left a lot to be desired. The BoE Consumer Credit was forecast to fall from £1.108 billion to £0.85 billion, but the actual data dropped to £0.898 billion. Mortgage Lending declined beyond the market consensus of a dip from £2.34 billion to £2.3 billion, with the actual result having dropped to £2.28 billion. Mortgage Approvals was particularly disappointing having been forecast to rise from 66, 100 to 69, 000, the actual data declined to 64, 210.
Hong Kong data on Monday has been positive. Yearly Retail Sales eclipsed the market consensus of a rise from -4.5% to -3.1% with the actual data showing a promising leap to 2.8%. Ordinarily this would have put the Hong Kong Dollar in a strong position against many of its peers, but riots and protesting have curbed any positivity. ‘Only when the government makes a substantial response, then we will advise people to retreat,’ Chan Kin-man, a leader of the Occupy Central with Love and Peace protest group, said in an interview this morning. ‘They never talk to us directly. We are always ready for dialog and negotiation’.
Forecast for the Pound Sterling to Hong Kong Dollar Exchange Rate
With nothing in terms of Hong Kong data for the rest of the week it is highly likely that the GBP/HKD exchange rate will appreciate over the next few days. Until there is an end in sight for the current protests and riots, negative sentiment towards Hong Kong will dampen demand for the currency.
The Pound Sterling to Hong Kong Dollar exchange rate has reached a high today of 12.6300.
UPDATE
The Pound Sterling to Hong Kong Dollar (GBP/HKD) was trading in a narrow range on Tuesday as civil unrest in Hong Kong continued.
Despite an escalation of the conflict, the Hong Kong Dollar did manage to rebound from an almost two year low against the US Dollar, advancing to 7.7629.
The GBP/HKD exchange rate was supported by the UK’s better-than-anticipated second quarter growth data.
