The Hong Kong dollar regained some ground on Tuesday, consolidating after it hit a nine-week low against the US dollar in the previous session. The market showed little immediate reaction to news that Joseph Yam, chief executive of the Hong Kong Monetary Authority (HKMA), would step down from his post on October 1.
The local currency was up 0.01 percent from late Monday trade in Asia, after shuffling between 7.7511 and 7.7533. One dealer said the market seemed to have stabilised with less US dollar buying on Tuesday. Another dealer said there had been some profit taking after the USD/HKD spot rate reached a high level yesterday.
The HKD touched a low of 7.7547 on Monday, its weakest level since March 12, partly due to corporate demand for the USD. There was talk in the market that US dollar demand might be related to the repatriation of funds from Bank of America's sale of shares in China Construction Bank last week. The Hong Kong currency is pegged at 7.80 to the US dollar but can trade between 7.75 and 7.85. Some dealers expect the local currency to stay in a narrow range, with attention focusing on the stock market's performance and fund flows.
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