The Hong Kong dollar hit its lowest level in almost 22 years on Thursday, undermined by strong corporate demand for the US currency. The Hong Kong dollar stood at 7.8211/12 to the US dollar at 1011 GMT, the lowest level since September 1985, according to the Hong Kong Monetary Authority.
On Thursday, it ended local trading at 7.8174/75. "We've heard some outright purchases in the spot exchange rate with the two- and three-month forwards from a house name in recent days," said a senior trader at a local bank. Another dealer at a European bank said there was some follow-through dollar buying after the spot rate broke the key 7.8180 in London trade overnight. The demand might have related to the IPOs repatriation.
The local currency has been under selling pressure as some newly listed companies switched proceeds raised from Hong Kong IPOs into foreign currencies. The Hong Kong dollar is pegged at 7.80 to the US dollar but can trade between 7.75 and 7.85.