Aug 05/14 – I am never wrong, I am just early sometimes…
During most of July the Hong Kong dollar has been bumping up against its upper band of 7.75 Hong Kong dollars per US dollar. This means that the Hong Kong Central Bank has been forced to sell HKD to maintain the peg. In doing so, the Central Bank has printed more HKD, expanding the monetary base.
The question is why the sudden demand for Hong Kong dollar…