The Pound (GBP) to Hong Kong Dollar (HKD) exchange rate strengthened on Monday as concerns over pro-democracy protests increased over the weekend as demonstrators continued their standoff with police, hopes for a resolution lie with Tuesday’s talks.
Data released early in Monday’s session showed that unemployment in Hong Kong remained stable at 3.3%, matching economist forecasts. The jobless rate remained unchanged in the July to September period.
The data however does not take into account the impact of the pro-democracy protests, which have paralysed parts of the city.
‘While the latest figures indicated a still largely tight labour market up to September, they had not yet reflected the disruptions to economic activities caused by the recent ‘Occupy Central’ movement on many industries such as retail, catering and inbound tourism. The ‘Occupy Central’ movement, if protracted, would inevitably dampen the local consumption market in the fourth quarter with potential knock-on impact on the employment market. We will stay vigilant and monitor development closely,’ said Matthew Cheung Kin-chung, Secretary for Labour and Welfare.
The unrest in the city has led to dozens of people being injured and violence broke out over the weekend, which led to a score of injuries. Four people were arrested on Monday and twenty-two police officers were wounded.
Concerns that Tuesday’s talks due to be held between the government and students who have led the protests over elections due to be held in 2017 are likely to achieve little are also putting pressure on the Hong Kong Dollar.
The protests are due to students wanting free and fair elections for the leadership of Hong Kong, but the Chinese government has ruled that it will screen candidates first. The protestors have called on Hong Kong’s Beijing backed leader Leung Chun-ying to resign.
The Pound advanced on the back of data released over the weekend, which showed that consumer confidence has advanced to its highest level in three years. The report published by accountancy firm Deloitte showed that more people were confident and three points higher than the same period as last year.
Deloitte head of travel, hospitality and leisure Graham Pickett said; “Even without growth in real incomes, consumer confidence has continued to rise.Lower oil prices and commodity prices and a strengthening pound have led to a sharp decline in inflation. An improving jobs market and lower inflation has also been a real tonic.’
Also offering support to the currency was a separate report, which showed that house prices advanced strongly in October. According to the data released by Rightmove, house prices increased from the previous month’s level of 0.9% to 2.6%.
The Pound Advanced to a Session High of 12.52 against the Hong Kong Dollar.
