Hong Kong Defends Currency Peg, Bitcoin Pumps Back to $97K
The post Hong Kong Defends Currency Peg, Bitcoin Pumps Back to $97K appeared on BitcoinEthereumNews.com.
Hong Kong Monetary Authority intervenes with $9.4 billion to defend the HKD peg to the U.S. dollar. Bitcoin rises 3%, reaching $97K, as risk conditions ease and sentiment improves. New Hampshire creates the first state-level Bitcoin reserve, allowing up to 5% of public funds in crypto. Tuesday, the Hong Kong Monetary Authority (HKMA) intervened in the foreign exchange market, selling HKD 73.3 billion (approximately $9.4 billion) to defend the Hong Kong dollar’s peg to the U.S. dollar. This move came after sharp volatility in regional markets, triggering reactions across currencies and money markets. Bitcoin surged by 3% as traders responded to easing risk conditions. Additionally, a new state-level crypto policy in New Hampshire further boosted sentiment. HKMA Intervenes as HKD Hits Band Limit On Tuesday, the Hong Kong dollar spiked to the strong end of its trading band, nearing the 7.75 floor of its peg to the U.S. dollar. In response, the HKMA conducted two foreign exchange operations, selling HKD 73.3 billion to maintain the peg. Related: India-Pakistan Clashes Spark Fears of Crypto Market Volatility – Is a Bitcoin Crash Looming? According to QCP Broadcast, the intervention had an immediate impact on money markets. The one-month Hong Kong Interbank Offered Rate (HIBOR) plunged nearly 60 basis points in a single session. This sharp move forced hedge funds to unwind heavily crowded USD/HKD carry trades. QCP also noted that further strengthening of the Hong Kong dollar could trigger another leg down in HIBOR, increasing the risk of a more disorderly exit from these trades. FX Moves Ignite Speculation of U.S.-China Talks The broader FX market responded quickly to the HKMA’s move, with traders speculating that it may signal easing tensions between the United States and China. Reports suggested that discreet trade negotiations could be underway in Switzerland. Risk appetite improved across…
Filed under: News - @ May 8, 2025 12:23 am