The Hong Kong dollar held near a nine-month lows against the US currency on Tuesday, pressured by decline in the city's stock market. The domestic currency fell to 7.7667 to the US dollar.
At one point touching the lowest level since September 8, before recovering a little in the afternoon following a firmer yen after the Bank of Japan (BoJ) suggested it would raise interest rates soon.
The Hong Kong dollar was trading at 7.7658/60 per US dollar, compared with Monday's close of 7.7658/59. The yen rose to 115.01/05 to the US dollar from 115.48 in late New York trade on Monday. BoJ Governor Toshihiko Fukui said monetary policy decisions should be taken early if warranted by economic conditions, raising market expectations for a rate rise from zero as early as July.
Dealers said further gains in the local currency would be limited, given weakness in the equity market and a wide interest rate differential with the US rates could continue to attract investors to the US dollars.