Core Viewpoint - The Hong Kong Monetary Authority (HKMA) intervened in the market by selling HKD 60.543 billion due to the Hong Kong dollar reaching the strong-side convertibility guarantee, marking the first occurrence since October 28, 2020 [1] Group 1: Market Intervention - The HKMA injected a total of HKD 116.614 billion into the market on May 3 and May 5 prior to the intervention on May 6 [1] - The strong-side convertibility guarantee was triggered as the HKD/USD exchange rate reached 7.75, prompting the HKMA to buy USD and sell HKD to stabilize the exchange rate [1] Group 2: Currency Dynamics - The recent strength of the HKD is attributed to increased demand related to stock investments, which supports the HKD exchange rate [2] - The USD index fell to a low of 99.60, with a maximum decline of over 0.43%, leading to capital flows towards Asian currencies [1][2] - The offshore RMB fell below the 7.20 mark against the USD, reaching a low of 7.19, marking the first occurrence since November of the previous year [1] Group 3: Economic Outlook - Jefferies' global FX head suggests that the natural resolution to trade tensions may involve a depreciation of the USD, making bets against the USD in favor of Asian currencies potentially meaningful [2] - South China Futures indicates a temporary easing in international trade tensions, which may lead to a technical recovery of the USD index, although the long-term economic outlook for the US remains weak, constraining the USD's strength [2]