HONG KONG, Dec 11 (Reuters) - The Hong Kong dollar firmed as much as 0.2% to 7.8105 per dollar on Wednesday to its strongest level since July 24.
Ken Cheung, chief Asian FX strategist at Mizuho Bank, said the move was likely due to the unwinding of bets previously profiting from ‘carry trades’ - borrowing with low interest rates in Hong Kong to purchase U.S. Dollar assets.
“After spot broke through a certain level there may have been some stop-loss orders (in these carry trades), and people kept chasing USDHKD lower,” he said.
Hong Kong’s currency is pegged to the greenback at a tight range of 7.75-7.85 per dollar and the city’s monetary policy moves lock-step with the United States.
The Federal Reserve is in the middle of its two-day policy meeting and is expected to hold interest rates when it concludes later on Wednesday. (Reporting by Noah Sin; Editing by Toby Chopra)