The Hong Kong dollar inched lower against the greenback on Wednesday as investors chased higher American interest rates, traders said. Discounts on forwards trimmed early lows after China's central bank dampened market speculation of an imminent yuan policy change, they added. The local currency fell to 7.7819/20 per US dollar from 7.7803/04 in late Asian trade on Tuesday.
Dealers said local interest rates are now well below their US counterparts. Although its currency is pegged to the US dollar, Hong Kong has not followed all the US interest rate increases this year because local banks have surplus cash and loan demand is weak.
Some dealers said the currency weakness also stemmed from sales of Hong Kong dollars by investors after the postponement of the city's US $3 billion Link real estate investment trust IPO.
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