The Ups And Downs Of The Hong Kong Dollar

It does make headlines of sorts, of course, but they tend to be rather less pronounced than others.  This recent news story featured in the online Wall Street Journal on the 10th June illustrates the kind of situation the Hong Kong dollar has found itself in of late.  You can read it here.

Sometimes when you look at the exchange rates between two currencies for a longer period of time – let’s say a month for example – the ups and downs can be very pronounced.  But this hasn’t always been the case when we have looked at the Hong Kong dollar.  For example, when we looked at the last month’s worth of figures between this currency and the US dollar, we saw there was actually very little difference between them.  If you had been checking the exchange rates on your currency converter, you would have seen that there was no noticeable gap between them.

On the 12th May the US dollar was picking up 7.7501 Hong Kong dollars.  Sixteen days later it reached the peak point between the 12th May and the 12th June – and that was a barely impressive 7.7531.  The difference between those two amounts, if you hadn’t already worked it out, was a mere 0.003.  When you compare that result to those attained by other currency pairings, you will see how unremarkable it really was!

But is this just a one off type of result, or is there more to see from comparing the Hong Kong dollar with other currencies?  Let’s find out.

As it happens the British pound actually did a lot more than the US dollar managed to do in the same time frame against this currency.  During the month between the 12th May to the 12th June, the lowest exchange rate the pound managed against the Hong Kong dollar was a mere 11.704.  The highest exchange rate during the same time did not occur until the 3rd June, when the pound was bagging 12.809 Hong Kong dollars.

Now you don’t need a calculator to tell that the difference there was much greater than it had been between the Hong Kong dollar and the US dollar.  In fact it was an impressive 1.105.

Our thoughts now are whether this was a one off – was this just a good result for the pound?  Or was the previous result for the US dollar just a poor one off?

To try and figure this out, let’s compare the Hong Kong dollar against another major currency – this time the Euro.

Well this actually falls closer to the result gained by the British pound than it does to the meager result gained by the US dollar.  The 18th May saw a low point of 10.460 against the Hong Kong dollar, while the high point was reached just two days into June, as the exchange rate climbed up steadily to hit 11.037.  The difference there for those that are keeping track was 0.577.

Let’s check one final currency now, which this time is the Japanese yen.  This produces an equally up and down graph to some of the other currency pairings we have looked at.  But the changes between currencies here is perhaps not as notable as the others.

The interesting thing here is that the low point between the 12th May and the 12th June was actually reached AFTER the high point between those same dates.  That stands in contrast to the other currencies we have looked at.  The low point was 0.0787 and was reached on the 8th June, whereas the high point was on the 22nd May, when an exchange rate of 0.0824 was reached.

It certainly has been an interesting few weeks for the Hong Kong dollar in one way or another.  It is definitely the case that looking at the extreme highs and lows against specific currencies in a specific time period can tell you just as much as looking at the day to day picture.  And in some cases, as we have seen here, it can tell you a lot more.

So bear this technique in mind if you want to learn more about certain currencies.  It can sometimes be the case that you are too close to them on a daily basis.