1, the Fed's interest rate hike will lead to an increase in the interest rate of the US dollar, thus attracting funds from low-interest countries (China and Hongkong) to flow to high-interest countries (the United States). This will lead to the depreciation of the Hong Kong dollar.
2. The Fed's interest rate hike will lead to an increase in libor (London Interbank Offered Rate), while hibor (China-Hong Kong Interbank Offered Rate) will remain stable. This will lead to the widening of libor-hibor spreads, which in turn will lead to the selling of Hong Kong dollars.
3. In 2023, the economies of China and Hongkong will face many challenges, such as the bubbles in the real estate market and the stock market, and the slowdown in economic growth. This makes the HKMA in China and Hong Kong afraid to follow the Fed's interest rate hike easily, otherwise it will put greater pressure on the economies of China and Hong Kong. China Mainland and Hong Kong choose to maintain low interest rates, which will lead to the depreciation of the Hong Kong dollar.
4. After the outbreak of the Asian financial crisis, China and Hongkong, as Asian financial centers, suffered a severe impact. Capital outflow, the reduction of foreign exchange reserves and the collapse of the real estate market have all led to the depreciation of the Hong Kong dollar.
5. Hong Kong stocks plummeted, investors' confidence in Hong Kong dollar assets weakened, and they chose to sell Hong Kong dollar assets, which led to the depreciation of the Hong Kong dollar.