Posting this for the folks taking a keen interest in the HKD
Data out earlier from Markit on the Hong Kong PMI for August:
- The seasonally adjusted headline IHS Markit Hong Kong Purchasing Manager's Index™ (PMI™) 40.8 in August
- from 43.8 in July
- signalling the steepest deterioration in the health of the private sector since February 2009
- sharper decline in new order intakes
- business confidence slumping to its lowest on record
Further comments from the report:
- "The latest PMI data reveal a Hong Kong economy flirting with recession in the third quarter as business activity is increasingly aggravated by protest-related paralysis. "The survey is now broadly indicative of the economy contracting at an annual rate of around 4.0-4.5%. "The executive authorities of the Hong Kong SAR recently unveiled an economic stimulus plan to support flagging growth momentum, but any further economic weakness will mean policymakers are likely to consider larger stimulus measures. "The rates of decline in output, new orders and export sales accelerated sharply in August, with the only other time that the PMI survey has recorded a steeper downturn, in its more than two decades of history, been during the SARS epidemic in 2003 and the global financial crisis in 2008-2009."
Long term look at the USD/HKD, HKD is relatively weak and not far from the limit at 7.85
HKD has been nudging it weakest many times before and the HKMA have held the band. Political risk on this scale we are seeing is a new development though.
