Here’s why the Trump administration’s threat to hurt Hong Kong’s dollar peg won’t work

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Hong Kong one-hundred dollar banknotes and U.S. one-hundred dollar banknotes are arranged for a photograph in Hong Kong on April 15, 2019. Paul Yeung | Bloomberg | Getty Images

 

Top News and Analysis– ”The U.S. threat to look for ways to hurt the Hong Kong dollar’s peg to the greenback will not likely be realized, analysts say.”
Strategists at Singapore bank DBS say the U.S. “cannot unilaterally revoke the HKD peg.”
“Top advisors to U.S. President Donald Trump were reportedly considering proposals to strike against the Hong Kong dollar peg, in a bid to punish China’s move to implement a national security law on Hong Kong, said a report by Bloomberg last week citing unnamed sources.”
“Bloomberg reported that the Trump administration could undermine the peg by limiting Hong Kong banks’ ability to purchase U.S. dollars.”

 

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