The Hong Kong dollar rose to its highest level in almost four months on Monday, bolstered by continuing fund flows into the territory and a broad-based decline in the US currency after a weak April jobs report.
The local currency was trading at 7.7514/15 to the US dollar, strengthening from Thursday's close of 7.7528/29. It had firmed to 7.7512, its highest point since January 13.
Hong Kong financial markets were closed on Friday for a public holiday. "There was some US dollar selling against Asian currencies," said a dealer at a European bank.
The US dollar was under selling pressure after softer-than-expected April jobs growth data reinforced market speculation that the Federal Reserve could pause in raising interest rates after an expected increase to 5 percent from 4.75 percent on May 10.
Some dealers said a rally in Hong Kong's share market also boosted sentiment.
The benchmark Hang Seng index climbed 1.69 percent on Monday to a fresh 5-1/2 year highs on expectations that US and domestic interest rates would soon peak. The China Enterprises index of H-shares was up 3.05 percent to 8-1/2 year highs.
The Hong Kong dollar has been supported by a steady inflow of funds for upcoming IPOs and on lingering speculation of a further yuan appreciation, dealers said.
Hong Kong's currency is allowed to trade between 7.75 and 7.85 per US dollar.
The United States has been pressing China to allow the yuan to trade more freely.