Fed rate hike imminent Hong Kong stocks or funds face pressure

  Hong Kong dollar is facing accelerated depreciation pressure since the Federal Reserve came into force in December 2015 since the normalization of monetary policy, interest rates have been a total of five times。
Almost one-sided market expectations the Fed will raise interest rates this week by 25 basis points again。
  With the Fed to raise interest rates, Libor Libor will rise。 And after the financial crisis, monetary policy is the Hong Kong market funds face very ample, monetary base in Hong Kong in mid-2015 Aggregate Balance was as high as HK $ 424.4 billion。 After the Federal Reserve to tighten monetary policy, although the Aggregate Balance showed remarkable decline, but as of February 2018, Hong Kong is still the Aggregate Balance of HK $ 179.7 billion, it remains very high level, the Hong Kong interbank interest rates remain low HIBOR。
So the Fed to raise interest rates lead to a further rise in the Libor interest rate will increase the difference between Hong Kong and the United States, leading to the depreciation of the Hong Kong dollar appears to accelerate。   In fact, since the Federal Reserve to tighten monetary policy, the Hong Kong dollar exchange rate has seen a continued weakening。 Hong Kong dollar exchange rate since early 2017 continued depreciation of the US dollar against the Hong Kong dollar exchange rate rise this month, it has been repeatedly broken, which March 16 intraday rise is broken, refresh the record high since the linked exchange rate system, from the HKMA set the weak-side convertibility Undertaking within a whisker。 Hong Kong Monetary Authority Chief Executive Norman Chan has indicated a few days ago, he said that if the Hong Kong dollar hit a weak-side Convertibility Undertaking, the HKMA will stabilize the exchange rate shot。 Therefore, I believe that before the Hong Kong dollar to break through, the HKMA does not intervene, so Wednesday's rate hike, expected to weaken further promote Hong Kong dollar exchange rate, or the first time in history a chance to hit a weak-side Convertibility Undertaking lines。
  The risk of capital outflows from the beginning of 1983 to HK $ warming pegged exchange rate system, to HK dollar exchange rate to the US dollar。 Hong Kong Monetary Authority to limit exchange rate fluctuations of the upper and lower limits, the weak-side Convertibility Undertaking, the strong-side Convertibility Undertaking, fluctuations in the exchange rate to the upper and lower limits for currency trading HKMA will, in order to control the open market exchange rate。
Hong Kong's linked exchange rate system can limit the depreciation of the exchange rate of the Hong Kong dollar space to some extent, but when it comes to the weak-side Convertibility Undertaking lines, on the financial side, the Hong Kong market will tighten passive situation。
  Market analysts said, on the one hand, the direct cause of the current round of the Hong Kong dollar weakness is to expand the Hong Kong and the United States spreads。 After the Fed rate hike, Hong Kong and the United States spreads continued to widen, will further boost the carry trade。 When the dollar will be significantly higher than the Hong Kong dollar interest rates, it means that investors can arbitrage by borrowing dollars in exchange for the Hong Kong dollar, US dollar capital flows。
Superimposed on the gradual tightening of US monetary policy and the attitude of the world's major central banks synchronized into the normal monetary policy, although the phenomenon of a substantial outflow of foreign capital market in Hong Kong at present does not appear, but the dollar had to reflux into the Hong Kong market funds face a risk faced this year。   On the other hand, once the Hong Kong dollar hit a weak-side Convertibility Undertaking, the HKMA will sell for HK $ releasing dollar, Hong Kong dollar exchange rate to ensure that the guarantee falls within the scope of the Link。
But at the end of 2 Hong Kong official foreign currency reserve assets of US $ 443.5 billion, a new record high。 In a strong foreign exchange reserves to support the Hong Kong Monetary Authority on the stability of the Hong Kong dollar confidence。