Hong Kong’s dollar rose for a fourth day toward the stronger end of its trading band against the U.S. currency on growing confidence in the future of the city’s 32-year-old peg and as the yuan stabilized.
The Hong Kong dollar gained 0.01 percent to HK$7.7544 per dollar at 1:20 p.m. in Hong Kong, data compiled by Bloomberg show. The currency is trading within 0.06 percent of the strong end of its trading band of HK$7.75-HK$7.85. S
“Worries about the peg have completely receded as well as concerns about a China currency devaluation,” said Sim Moh Siong, a foreign-exchange strategist at Bank of Singapore Ltd. “The Hong Kong dollar is benefiting from this relief.”
The local currency has climbed 0.84 percent since falling to an eight-year low in January amid speculation that its link to the greenback could be scrapped and as concern about China’s economic slowdown led to outflows from the city. The yuan traded in Hong Kong has jumped 3.3 percent from a five-year low in January after authorities intervened to support the currency and officials said there’s no basis for a continued depreciation.
A gauge of mainland Chinese shares listed in Hong Kong has risen more than 19 percent from this year’s low to approach a bull market amid rebounding commodity prices and speculation the nation’s policy makers will take steps to support economic growth.
Forex Trading Disruptor Sees Growth Thanks to Offshore Regulated StatusGo to article >>
The Hong Kong Monetary Authority has reiterated its commitment to keeping the linked exchange-rate system intact. The Hong Kong dollar has been pegged within its current range since 2005. It was linked to its U.S. counterpart in 1983, when negotiations between the U.K. and China over the city’s return to Chinese rule spurred an exodus of capital.
To contact the reporter on this story: Saijel Kishan in Hong Kong at email@example.com. To contact the editors responsible for this story: Richard Frost at firstname.lastname@example.org, Phani Varahabhotla
©2016 Bloomberg News