They might re-peg it, sure. How likely is it? Probably not very for now, since China probably doesn’t want to shock their exports until the world economy is in better shape.
I am glad that someone else shares my interest in pegging.
It’s simple physics - trying to contain an uncontainable flow of water, will inevitably at some point break the obstacles in its way. It’s all a matter of time.
You mean appreciate, no? If the Chinese central banks stops buying USD by the bucketload, the Yuan will only go up in value I’d have thought.
Bill Ackman has been a big believer in the eventual appreciation of the HKD. Has gone on record to say to-0hat Pershing Square has some derivative positives set up to make a lot of money if the peg ever breaks. The official line from Hong Kong is that there is no intention for the peg to be reviewed any time soon, but the Swiss were saying the exact same thing right up until they weren’t.
At one point, the peg will break, and anyone with a suitable position will look like a genius, because “it was inevitable.”
Meanwhile a ton of other folks will go broke with their positions, while waiting for that moment, or perhaps just outperformed by people who invested in appreciating assets in the interim.
If you can time the break in the peg, then it’s awesome, otherwise, yeah, pegs historically break, and there’s no real reason why this one won’t one day. You can also just short insurance companies exposed to California earthquakes too, because we know the big one is coming eventually.