Only you can decide whether it is a good time for you to buy Hong Kong dollars or not. Do your own research considering factors such as economic growth, inflation, interest rates, labour market data, and trade figures for both countries. Remember to never trade with more money than you can afford to lose. And keep in mind that past performance is no guarantee of future returns. Banknotes are then run through a government exchange fund that holds U.S. dollars in reserves and records all transactions in the general accounts of the two currencies.
Production of the 1-mil ended in 1866, whilst that of the half-dollar and 1-dollar ceased in 1868, with only the half-dollar (now with the denomination given as 50 cents) resuming production in 1890. Production of all silver coins was suspended in 1905, only briefly resumed in 1932 and 1933 for the production of 5-cent coins. In an interview with CNBC, the HKMA chief executive said that the currency peg “is actually doing Hong Kong great in terms of providing the needed exchange rate stability, especially through cycles and during periods of uncertainty. It was introduced in 1863 and is among the most traded global currencies. USD HKD trading hours are the time when investors can buy and sell USD HKD. This means that investors have many different opportunities to trade USD HKD during different trading hours.
- The issue of Hong Kong dollar notes is governed today by the Hong Kong Monetary Authority (HKMA), the governmental currency board of Hong Kong.
- These notes were printed in paper in 2002 and in polymer since 2007.
- They are Hongkong and Shanghai Banking Corporation Limited; the Bank of China (Hong Kong) Limited; and the Standard Chartered Bank (Hong Kong) Limited.
- In 1960, cupro-nickel 1-dollar coins were introduced, these were then reduced in size in 1978.
- Eventually, there may come a point when the currency control over the Chinese Yuan is lifted or loosened significantly, and at such a time, the HKD will have no future key role to play.
These were not issued because the Japanese sank a ship carrying 1-cent coins bound for Hong Kong in the Second World War. The following year (1935), cupro-nickel 5 and 10 cents were introduced, replaced by nickel in 1937 and nickel-brass between 1948 and 1949. Copper-nickel 50 cents were issued in 1951 and first bore the name “fifty cents” in both Chinese and English, but these were changed to nickel-brass in 1977. In 1863, 1-mil (1⁄10-cent), 1-cent and 10-cent coins were introduced, followed in 1866 by 5-cent and 20-cents, half-dollar and 1-dollar. The 1-mil and 1-cent were struck in bronze, with the 1 mil a holed coin.
Learn first. Trade CFDs with virtual money.
The Hong Kong dollar was outlawed by the Japanese puppet government in 1943 and reinstated in 1945 after World War II. Hong Kong is now in sole control of the printing and administration of its currency, which is controlled by the Hong Kong Monetary Authority (HKMA). The Hong Kong dollar is made up of 100 cents and is often shown with the HK$ prefix to differentiate it from other dollar-denominated currencies.
In 1841, Hong Kong was established as a port for free trade, and at that time foreign currencies were freely in circulation, with no single currency for the country itself. Although the British government attempted to introduce its own coinage to the colony, it gave up the idea in the 1960s, and by 1863, London issued a special coinage to use in Hong Kong inside the Dollar system. By 1935, Hong Kong had abandoned the silver standard and introduced https://g-markets.net/ a crawling peg to the British Sterling currency, marking the moment at which the Hong Kong Dollar became a distinct unit of currency in its own right. When the country was occupied by the Japanese during the 1940s, the Japanese Yen became the only legal tender in Hong Kong; but following liberation, the local currency was reissued once more. The HKD became pegged to the US Dollar in 1972, and again in 1983 after a short period of free floating.
The U.S. dollar is the currency most used in international transactions. Several countries use the U.S. dollar as their official currency, and many others allow it to be used in a de facto capacity. As of today, coins in denominations of HK$10, HK$5, HK$2, HK$1, 50 cents, 20 cents and 10 cents are issued by the Hong Kong Monetary Authority on behalf of the Government of Hong Kong. Create a chart for any currency pair in the world to see their currency history. These currency charts use live mid-market rates, are easy to use, and are very reliable.
Historical Exchange Rates For Hong Kong Dollar to United States Dollar
Although Hong Kong has been a part of China for many years, it is still largely operated as an autonomous region with a small economy of its own, which is ranked 39th in the world according to its GDP. The GDP growth of Hong Kong has been fairly volatile in the last 20 years; however, overall it has usually been over 5%, and occasionally as high as 10%. Rates of inflation have also been erratic – up to 10% during 1995, but actually being negative for over 4 years at the turn of the century. In recent times, the interest rates of the HKD have been pretty low.
In 2012, the Hong Kong dollar traded towards the lower end of the peg at around 7.75 to 7.77. On 1 January 2016, it weakened sharply to 7.83 before quickly strengthening again to 7.76. The peg was first introduced in 1983 as a way to restore confidence in the HKD after a period of devaluation. The Hong Kong Monetary Authority sets the range and can adjust the band’s value if required. However, the pair has been allowed to trade between 7.75 to 7.85 since 2005.
Denominations issued in the 1860s and 1870s included 1, 5, 10, 25, 50, 100 and 500 dollars. These notes were not accepted by the Treasury for payment of government dues and taxes, although they were accepted for use by merchants. 25 dollar notes did not survive beyond the end of the 19th century, whilst the 1-dollar notes (only produced by the HSBC) were issued until 1935. The theory behind the peg is to reduce foreign exchange risk faced by importers, exporters, and international investors. Given that the Hong Kong economy is highly dependent on international trade and is externally focused, having a stable exchange rate is very important.
Trade USD / HKD Spot Forex
The USD has fallen over 4.5% so far this month as inflation data shows signs of cooling and expectations rise that the Federal Reserve will adopt a less aggressive approach to hiking interest rates. The Hong Kong Dollar (HKD) – currency of Hong Kong, which is issued in full autonomy under the supervision of a local regulator, Hong Kong Monetary Authority. The Xe Rate Alerts will let you know when the rate you need is triggered on your selected currency pairs. There is a reasonable chance that in the long term, the HKD will no longer be relevant, and could even become extinct. Eventually, there may come a point when the currency control over the Chinese Yuan is lifted or loosened significantly, and at such a time, the HKD will have no future key role to play.
At present, its exchange rate regime is a Linked Exchange System, which means that it is traded within a very narrow band against the USD. The interest rate of the HKD is based on an automatic mechanism designed to maintain the exchange rate’s stability. As it is only possible to issue Hong Kong Dollars if there are equivalent United States Dollars held on deposit currency trading strategies with the issuing banks, the outstanding issuance of HKD is effectively backed by the USD. The issue of Hong Kong dollar notes is governed today by the Hong Kong Monetary Authority (HKMA), the governmental currency board of Hong Kong. Under licence from the HKMA, three commercial banks issue their own banknotes for general circulation in the region.
Wallet Investor’s euro to Hong Kong dollar forecast for 2022 had the pair ending the year at 8.129, above where it was trading on November 16. Over the long term, the pair is expected to end 2025 at 7.726 as the Hong Kong dollar strengthens against the euro. In the Hong Kong dollar forecast for 2023, the currency was predicted to hold steady and continue trading at this level.
USDHKD Trading
However, the HK$10 banknote and all coins are issued by the Government of Hong Kong. As the Hong Kong Dollar is somewhat different to other currencies, its economic drivers are also different. While economic data such as GDP, current accounts, trade balances and inflation do have some importance, they are significant only up to a point, as the Hong Kong Dollar can only trade within a narrow band. Also, as the Chinese and Hong Kong economies are so closely linked, any type of Black Wednesday-type raid on the HKD would inevitably fail.
USD to HKD – Convert US Dollars to Hong Kong Dollars
As inflation rose to a 40-year high in the US, the Federal Reserve (Fed) has steadily hiked rates. In the November FOMC meeting, the Federal Reserve raised interest rates by 75 basis points (bps) to 3.75%. Two years later, in May 2020, the Hong Kong currency once again strengthened, with the pair’s rate dropping to 7.75. The Hong Kong dollar (HKD) has held at 8.85 against the US dollar (USD) across much of 2022, supported by the Hong Kong Monetary Authority (HKMA) intervention, which has hurt liquidity. More recently, USD/HKD has fallen to an eight-month low as the Hong Kong dollar strengthens.
These percentages show how much the exchange rate has fluctuated over the last 30 and 90-day periods. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
The majority of trades using the HKD are therefore solely for business transactions, or as part of a carry trade. The Hong Kong Dollar has a low interest rate at present, and this makes it an appealing currency for carry traders. It is possible to borrow Hong Kong Dollars cheaply and then use the money to buy a higher yielding debt in a country such as New Zealand or Australia. In 1972, the HK dollar was pegged to the U.S. dollar at a rate of HK$5.65 to $1 USD. Since then, it has remained pegged to the dollar, with the HKMA adjusting its value from time to time. The Hong Kong dollar has been pegged to a narrow trading band, which currently ranges between HK$7.7500 and HK$7.8500 per USD.