The Hong Kong dollar inched higher on Wednesday, tracking gains among other regional currencies as soft US manufacturing data and signals the Federal Reserve may have finished raising rates undermined the US dollar.
The local currency was trading at 7.7541/42 per US dollar, firming from 7.7549/50 in late Asian trade on Tuesday.
It had strengthened to the 7.7530 level in the morning session before some arbitrage trades emerged, one dealer said.
Since the local short-dated money rates were lower than their US counterparts, traders could earn an interest rate spread if they sold Hong Kong dollars for US dollars, the dealer added.
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