USD/HKD holds 7.8436 inside the peg band

The US dollar against the Hong Kong dollar (USD/HKD) finishes at 7.8436 by October 28, 2026 in the base case, at 7.7500 in the bull case and at 7.8500 in the bear case. The base case keeps that October 23 cross inside the 7.75–7.85 Convertibility Undertaking band.

Bank of Canada daily averages for October 23, 2026 put USD/HKD at 7.8436, using 1.3993 Canadian dollars per US dollar and 0.1784 Canadian dollars per Hong Kong dollar. European Central Bank (ECB) reference rates the same day round to 7.8436. The Hong Kong Monetary Authority (HKMA) stamped its daily statistics at 18:30 with an aggregate balance of HK$54,125 million and currency-board forex of +0 million. The base case runs to the October 28 Federal Open Market Committee (FOMC) statement.

Key Levels:

• Asset: USD/HKD at 7.8436 on October 23, 2026 — Bank of Canada Valet, FXUSDCAD divided by FXHKDCAD
• Base case target: 7.8436 by October 28, 2026 — unchanged cross, HKMA forex forecast +0 million
• Bull case target: 7.7500 — strong-side CU, HKMA sells Hong Kong dollars
• Bear case target: 7.8500 — weak-side CU, HKMA buys Hong Kong dollars
• Recent high: 7.8487 on October 21, 2026 — 13 pips under 7.8500
• Recent low: 7.8373 on October 22, 2026
• Invalidation level: above 7.8500 — bank dealing through the weak-side undertaking

How these USD/HKD levels were fixed

The band is the HKMA's published dealing rule. The Linked Exchange Rate System has run since October 17, 1983 inside HK$7.75–7.85 to one US dollar. The page on how the system works sets the Convertibility Undertakings (CUs) at 7.75 and 7.85. October spot is a cross because the bulletin's latest daily US dollar field is 7.847 on September 30, 2026. October 20–23 uses the Bank of Canada, checked to the ECB file, with the H.10 mark of 7.8478 on October 16 as the prior week. Balances are the October 23 daily page, the October 7 reserve release and the October 14 accounts. The horizon is October 28, 2026 on the FOMC calendar.

Related:CAD/CHF to 0.5936 by the December 9 Bank of Canada fix

Where the cross sits inside the band

The Convertibility Undertaking is the Hong Kong Monetary Authority's standing bid and offer in USD/HKD under the Linked Exchange Rate System (LERS). The Authority sells Hong Kong dollars at HK$7.75 per US dollar and buys them at HK$7.85, and the overview page places the market rate inside that band of one US dollar. The rule dates from October 17, 1983 and matches monetary-base changes with US dollar assets. On October 23, 2026 the Bank of Canada cross was 7.8436, 64 pips below 7.8500 and 936 pips above 7.7500. The October 21 cross printed 7.8487, 13 pips under the weak-side edge, and the October 22 cross printed 7.8373. The weak side is the nearest edge in that window. The HKMA series for September 30 was 7.847, and the base case keeps the cross at 7.8436.

Sources: Bank of Canada Valet daily averages, series FXUSDCAD and FXHKDCAD, retrieved October 24, 2026. USD/HKD equals CAD per USD divided by CAD per HKD, rounded to four decimals. The time window covered by these four columns is October 20–23, 2026.

The October 23 USD/HKD figure of 7.8436 is the Bank of Canada cross in the table, and the ECB rates of 8.7793 and 1.1193 round to the same four decimals. The HKMA daily monetary statistics at 18:30 that day showed the aggregate balance opening and closing at HK$54,125 million, with market activities and the discount window both at +0 million. At 16:00, intraday repo was HK$4,475 million of HK$30,000 million, overnight repo HK$0 million, and the primary liquidity provider line HK$3,000 million of HK$20,000 million. Certificates of Indebtedness of HK$661,785 million, notes and coins of HK$13,238 million, Exchange Fund Bills and Notes of HK$1,361,963 million and the aggregate balance sum to a monetary base of HK$2,091,111 million. Forex stays at +0 million in the forecast for October 26, October 27 and October 28, and the aggregate balance goes from HK$54,125 million to HK$53,992 million on October 28 after a HK$133 million Exchange Fund paper entry.

Why 7.8500 is the live edge into the FOMC

On September 17, 2026 the HKMA set the Base Rate at 4.25%. The formula is 50 basis points above the lower end of the federal funds target, or the five-day moving-average blend of overnight and one-month Hong Kong Interbank Offered Rates (HIBORs), whichever is higher. The funds leg was 4.25% and the HIBOR leg was 2.50% after the September 16 statement raised the range by 25 basis points to 3.75%–4% on a 12–0 vote. That gap leans USD/HKD towards 7.85.

"And, as I said at the policy symposium in Jackson Hole, I would be hard pressed to describe broad financial conditions as restrictive."

— Kevin Warsh, Chairman, Board of Governors of the Federal Reserve System (Federal Reserve transcript, September 16, 2026; the Board members list names Kevin Warsh as Chairman)

He put the jobless rate at around 4.1% after the Committee removed a dose of accommodation, which leaves 7.7500 as the bull case and 7.8436 as the base case. The next meeting is October 27–28, 2026, and the next projections meeting is December 8–9. The dates also anchor NZD/USD into the late-October Federal Reserve window and USD/CHF over the same late-October rate gap.

What the currency-board arithmetic leaves out

The forex forecast of +0 million is the public picture of HKMA dealing through October 28, and the page updates near 10:00 the next Hong Kong morning if a CU triggers outside local hours. On August 16, 2018 Norman T.L. Chan, then Chief Executive, said weak-side triggering ran "in the order of HK$16.8 billion in the last two days", with buying to continue at 7.85, which against HK$54,125 million would still be the bear case. End-September reserves were US$433.0 billion, and foreign assets of HK$3,576.0 billion were 1.71 times the HK$2,090.2 billion monetary base.

"And let me reiterate, we have no intention and we see no need to change the LERS."

— Eddie Yue, Chief Executive, Hong Kong Monetary Authority (HKMA inSight, January 9, 2025)

What would invalidate the base case

An unchanged 7.8436 on October 28, inside today's published edges, breaks if any one of these four observations prints:

• A named central-bank USD/HKD rate above 7.8500. The HKMA's bid for Hong Kong dollars is 7.85, so a higher official print means dealing has gone through the weak-side undertaking.
• A named central-bank USD/HKD rate below 7.7500. The HKMA's offer of Hong Kong dollars is 7.75, so a lower official print means the strong-side undertaking has been traded through.
• An HKMA announcement of a Convertibility Undertaking priced away from 7.75 and 7.85. The bull and bear levels are those two published prices, and a new price replaces both.
• A currency-board forex ticket priced away from 7.75 and 7.85. The daily page lists those tickets, including a next-morning update when a trigger falls outside Hong Kong hours.

Buying at 7.8500, with the cross left on that price, is the bear case and the band-hold stands. A print outside the band, or a new published edge, retires the base case.

What to watch through the October meeting

The FOMC meets on October 27–28, 2026, with the statement on the second day. The September 16 US decision was followed by the Base Rate notice on September 17, so an October 28 change would reach Hong Kong on October 29. The daily page, due near 19:00 Hong Kong time on October 26, 27 and 28, already shows forex of +0 million, Exchange Fund paper of HK$133 million on October 28 and HK$680 million afterwards, leaving HK$53,311 million. USD/TWD and the Asian dollar surplus is a floating question beside this peg.

TL;DR

USD/HKD holds 7.8436 by October 28, 2026 in the base case, 7.7500 at the strong-side Convertibility Undertaking and 7.8500 at the weak-side undertaking. The October 23 spot is the Bank of Canada cross, 1.3993 divided by 0.1784, and the ECB cross rounds to the same 7.8436. At 18:30 that day the HKMA showed an aggregate balance of HK$54,125 million and currency-board forex of +0 million, with that forex forecast repeated through October 28. The Base Rate stands at 4.25%. A print above 7.8500 or below 7.7500 breaks the band-hold.

FAQ

Why is the October 23 USD/HKD spot a Bank of Canada cross?

The HKMA bulletin's latest daily US dollar field, as retrieved on October 24, 2026, was still September 30 at 7.847. The October 23 spot divides Bank of Canada averages, 1.3993 Canadian dollars per US dollar by 0.1784 Canadian dollars per Hong Kong dollar, and rounds to 7.8436. ECB reference rates that day, 8.7793 Hong Kong dollars per euro over 1.1193 US dollars per euro, round to 7.8436 too. The H.10 rate for October 16 was 7.8478. All three sit inside the band, near the weak-side edge of 7.8500.

Why is the base case 7.8436 rather than the middle of the band?

The middle of 7.75 and 7.85 is 7.80, and the HKMA describes a band rather than a day-to-day target at 7.80. Marks sit near the weak side, at 7.8436 on October 23 and 7.847 on September 30. Forex of +0 million through October 28 fits an unchanged cross, and 7.7500 is 936 pips from the spot.

How does the September Federal Reserve hike reach the Hong Kong dollar?

On September 16, 2026 the FOMC raised the federal funds range by 25 basis points to 3.75%–4%, by a 12–0 vote. On September 17 the HKMA set the Base Rate at 4.25%, because 50 basis points over the lower end was 4.25% and the HIBOR blend was 2.50%. The higher of those two legs sets the Base Rate. A further funds-range rise on October 27–28 would lift the funds leg again, and the spot cap would remain 7.85.

What does a trade at 7.8500 mean for the Hong Kong dollar band?

A rate of 7.8500 is the bear case and still sits on the published edge. The HKMA buys Hong Kong dollars there, the aggregate balance contracts, and Hong Kong dollar rates are supposed to rise. On August 16, 2018 Norman T.L. Chan put weak-side triggering near HK$16.8 billion over two days and said buying would continue at 7.85. The band-hold ends above 7.8500, below 7.7500, or on a newly published undertaking rate.

This article is informational analysis only and is not financial, investment, or trading advice. Foreign-exchange, commodity, and equity markets are highly volatile and can lose substantial value rapidly. Leveraged products carry total-loss risk and may exceed the initial margin posted. Past performance and historical correlations do not guarantee future results. Do your own research and consult a regulated financial adviser before making any investment decision.