The Hong Kong dollar recovered some ground on Wednesday afternoon, tracking other currencies as the US dollar lost some support in late Asian trade. The US dollar had been boosted in the morning across Asia after the US Federal Reserve left interest rates unchanged but by the afternoon was off its day's highs.
"In the morning investors took the Fed statement as signalling there might still be more US rate rises in future," a trader said. "But when Europe opened, the interpretation (of the statement) was a bit different and back to economic risk in the United States and the dollar came under pressure again."
The Hong Kong dollar was trading at 7.7774/75 to the US dollar in late trade, down from 7.7769/71 late on Tuesday but off a day's low at 7.7783 in the morning when arbitrage trade was active. Under the territory's linked exchange rate system, the Hong Kong dollar can trade between 7.75 and 7.85 to the US dollar. Interbank rates fell after Hong Kong banks left interest rates unchanged in the wake of the Federal Reserve's decision not to raise US rates.
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