Speculators target Hong Kong's currency on outflow concern
Sign up now: Get ST's newsletters delivered to your inbox
Hong Kong is the epicentre of escalating US-China tensions following Beijing's shock decision to impose a law to curb dissent in the city.
PHOTO: REUTERS
HONG KONG (BLOOMBERG) - Fears that capital will flee Hong Kong are visible just about everywhere in the city's financial markets, yet the currency remains resistant for now.
Speculators are betting on significant depreciation with derivatives, sending a measure of bearishness to near its highest level of the year. Volume on Hong Kong dollar options soared to US$3.7 billion (S$5.26 billion) on Friday (May 22), with a third of the trades betting the pegged currency would hit or break the weak end of its trading band.