For A Fist Full Of Dollars?

"The Hong Kong dollar is today trading at the lowest level since 1984." - Jeffrey Snider

Had eyes on this since early 2017, a sign of Chinese laundering Hong Kong down the river, for a fist full of dollars.

Above, note the HKD decline versus the RMB appreciation. Confirming the carry, the 1-month Hibor and Libor spread has widened to -91 basis points as of January 2018, its largest level since 2008.

Interesting codicil: If HK flows were outgoing this might normalize the HIBOR LIBOR spread. Somebody conducting carry trades might also be borrowing HKD to invest not just in USD assets...

But also offshore RMB (CNY) assets, sitting in an offshore warehouse with an overestimated declared value perhaps? Should the HKD top 7.85 on USD, that might trigger HK to sell USD and buy HKD. Just sayin.

Chart of The Week