The Hong Kong dollar remains strong against the US dollar

The Hong Kong dollar has endured a lot in the last year, yet it remains strong against the US dollar. However, the pair is expected to slightly rebound in the foreign exchange market as the Hong Kong dollar feels the pressure. Looking at the chart, the pair is widely bearish considering that the 50-day moving average remains significantly lower than the 200-day moving average. However, it’s worth noting that the HKD is pegged to the USD with the Hong Kong Monetary Authority maintaining it at its target rate. The Hong Kong dollar is also affected by the suffering US economy, which is currently facing its greatest economic crisis. To make matters even worse for Hong Kong, its economy might enter a tougher recession than prior projections. Hong Kong’s Finance Chief recently warned that the country’s gross domestic product for the first quarter could contract by 4% to 7% this year thanks to the ongoing coronavirus pandemic.