Best Gold Stocks to Buy Now: AABB, GOLD, GDX 
In the history of the currency market, the break of a peg tends to be the most profitable/loss-making trade. It made George Soros famous and rich, who successfully orchestrated Black Wednesday when BOE had to abandon its peg with German Deutschemark. Soros made more than a billion from that trade. Similarly, many retail brokerage firms like FXCM suffered big losses as the Swiss National Bank’s (SNB) peg abandonment led to 40% appreciation in Franc against Euro in a matter of minutes in January 2015.
Now, according to our calculations, there is a real possibility that Hong Kong Monetary Authority (HKMA) might have to abandon its peg with US Dollar but temporarily. Hong Kong has a rather long history of pegging its currency. Since 1983, it has been pegging its currency around 7.8 per Dollar. Hong Kong Monetary Authority (HKMA) in 2005, revised the peg to a range of 7.75-7.85 per Dollar.
The reason behind the speculation is Hong Kong economy is now trapped between, a possible weakness in the Chinese economy, on which its GDP and exports largely depend and rate hikes from US Federal Reserve. HKMA usually raises rates with US Fed. As usual, HKMA has followed the Federal Reserve in hiking rates and since 2015 December, it has hiked rates six times by 25 basis points each. The increased interest rates add pressure on Hong Kong’s economy that has seen its GDP decline from 4.3 percent y/y in March 2017 to 3.4 percent as of December 2017.
Trade idea:
The Hong Kong Dollar (HKD) is currently trading close to the lower range of the peg at 7.847 per dollar. We expect HKD to breach the peg even if temporarily and reach as low as 7.96 per USD. Do note that HKMA has a long history of defending the peg successfully and sometimes with ruthless measures.
