Hong Kong dollar drops most since 2011 as bets mount on peg's end

[Dosser]

Don't hold your breath for the HKD peg to drop anytime soon. The peg has survived many rounds of crisis and many speculators beaten back starting with the AFC etc and the last one the GFC. This time the pressure is not as great as the previous crisis or the last GFC. the peg will drop or revised(maybe to a basket currency case) when it is least expected and no speculators betting on it is my guess.

Agree. The movement of the HK$ headlined in the article was tiny in comparison with the falls that many other currencies have exhibited. However, the key issue is later in the article, the effect on the stock and housing markets in Hong Kong. Selling of Hong Kong dollars will suck liquidity out of the markets, which are already falling. The housing market has only just turned down, and will be hit by a combination of reducing liquidity, increasing supply and potentially increasing interest rates. Good news for younger workers who were priced out of the market. I wonder if we will see a repeat of the 70% fall seen 1997-2003? A 70% fall from late 2015 would still see prices at nearly double their 2003 lows, based on prices in our estate.