Spot USD/HKD is just a touch below recent highs, last near 7.8345. The broad uptrend in the pair has been maintained. Friday lows around the 7.8250 region were supported. Late June highs aren't too far away, which come in around 7.8390, beyond that is earlier June highs around 7.8440, then the top of the peg band at 7.8500. On the downside, the 200-day EMA is near 7.8300, the 100-day at 7.8265.

• A move back below the 20-day, near 7.8200, is likely required to unwind current bullish momentum. Spill over from higher USD/CNH levels has also been a factor today.
• In terms of outright forwards, the 12mth USD/HKD has seen some selling interest above 7.7800 in recent sessions. We track just below this level currently. For now, the 6mth is holding above 7.8000.
• The 3 month US-HK rate differential is still tracking higher, back to +70bps, levels last seen in mid-June. The 1 month risk reversal is relatively steady despite the continued move higher in spot.
• On the data front we have the July composite CPI on tap later today, the market expects +1.9%y/y (prior was +1.9%).