Daily Forex Market Report 24-Nov-2022: GBP tops 1.21, USD Falls amid Fed Minutes

Hong Kong Dollar bears the Brunt of Fed

US Dollar

The US dollar fell to its lowest in over a week after the release of the latest Federal Reserve meeting minutes, but there are buyers for the greenback this morning while the US goes on holiday for Thanksgiving.

Minutes from the last Federal Open Market Committee meeting confirmed most members of the rate setting group believe they should start slowing the pace of rate hikes soon, which was pretty much known.

Pound Sterling

Sterling topped 1.21 for the first time since mid-August, while the euro butted up against recent highs above 1.044.

Sterling topped 1.21 for the first time since mid-August - Source Trading View

Euro

With EUR pushing through its recent highs as well as the 200-day moving average, some traders suggested this could herald further US dollar weakness.

Trading in the single currency this morning has been weaker, with EURUSD up just 0.2% at 1.0416 despite Germany’s most prominent leading indicator, the Ifo index, staging a strong rebound.

Hong Kong Dollar

The Hong Kong dollar was source of much chatter after absorbing plenty of pain this year as the Fed hikes rates.

Hedge fund billionaire Bill Ackman said on Twitter that he has taken a “large notional short position” against the HKD in view that its peg with the dollar cannot last much longer.

“The peg no longer makes sense for Hong Kong and it is only a matter of time before it breaks,” he added in a tweet – echoing previous bets against the peg by George Soros and Kyle Bass in the past that both failed.

The Hong Kong Monetary Authority has a mandate to keep the currency trading in a range of HK$7.75 to HK$7.85 to the USD, which it has managed so far.

HKD has traded at the weaker end of the peg range for most of the year but pressure has eased amid indications that the Fed might be slowing the pace of rate hikes, leading the USD to HK$7.81 from the HK$7.85 level it has traded since January.

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