The Hong Kong dollar tested the strong end of its allowable trading band for a second session Monday, as regional currencies rally amid broad weakness in the greenback.
The local currency appreciated to its limit of 7.75 to the US dollar before erasing gains to be little changed at 7.7507. The central bank pegs the currency in a trading band between 7.75 and 7.85.
The Hong Kong Monetary Authority on Friday sold about HK$47 billion ($6 billion) of local dollars to defend the currency peg, the first time it has purchased greenbacks in five years. The HKMA previously intervened in 2022, where it sold US dollars to defend the weaker end of the peg.
The rally in Asian currencies comes at a challenging time for the region’s trade-dependent economies as exporters are already facing the implementation of higher US tariffs.
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The US dollar has weakened in recent months as President Donald Trump’s tariff policies have raised questions over US exceptionalism and worsened the outlook for the world’s largest economy.
