USD/HKD carry trade shrugs off interventions
The widening gap between Hong Kong and US dollar interest rates is encouraging traders to open new carry trade positions, despite recent interventions from the Hong Kong Monetary Authority (HKMA) to narrow the spread.
The carry trade is a popular trading strategy that allows investors to borrow at a low interest rate and invest in assets that yield a better return.
In this case investors are borrowing against the lower US rate and investing in the Hong Kong dollar. This is a reversal of the